LIBRARY 

UNIVERSITY  OF  CALIFORNIA 
RIVERSIDE 


THE  WORKS    MANAGER   TO-DAY 


Published  October  1917 
Second  Impress  ion  September  1918 


THE  WORKS  MANAGER 
TO-DAY 

AN    ADDRESS     PREPARED    FOR    A 

SERIES  OF   PRIVATE  GATHERINGS 

OF  WORKS  MANAGERS 


BY 

SIDNEY   WEBB 

PROFESSOR  Or  PUBLIC  ADMINISTRATION  ftl'THE  UNIVERSITY  OF  LONDON 

(SCHOOL  OF  ECONOMICS  AND  POLITICAL  SCIENCE) 


LONGMANS,    GREEN    AND    CO. 
39   PATERNOSTER  ROW,   LONDON 

FOURTH   AVENUE  &  30TH   STREET,    NEW   YORK 
BOMBAY,   CALCUTTA,   AND   MADRAS 


TS  455 

P37 


CONTENTS 


PAGE 

I.  THE  FUNCTION  OF  MANAGEMENT        ...  2 

II.  REDUCING  THE  COST  OF  PRODUCTION          .         .  15 

III.  APPOINTMENTS  AND  DISMISSALS.                  .         .  21 

IV.  THE  RECOGNITION  OF  TRADE  UNIONISM     .         .  34 
V.  THE  STANDARD  RATE 41 

VI.  PAYMENT  BY  RESULTS 55 

VII.  THE    MANAGEMENT   SHOULD    HAVE    NOTHING   TO 

DO    WITH    THE    RATE    OF    WAGES   .  .  .99 

VIII.  THE  "MANNERS"  OF  MANAGEMENT    .         .         .103 

IX.  DISCIPLINE 117 

X.  FATIGUE  AND  ACCIDENTS 122 

XI.  "  SCIENTIFIC    MANAGEMENT  "     AND    "  WELFARE 

WORK" 131 

XII.  ON  "CHOOSING  EQUALITY"         .         .         .         .153 
INDEX         ...  159 


THE  WOBKS  MANAGEE  TO-DAY 

MR.  CHAIRMAN  AND  GENTLEMEN — You  have  asked 
me  to  talk  to  you  about  the  function  of  the  Works 
Manager  and  his  relation  to  the  staff.  Whilst 
I  appreciate  the  compliment  that  you  pay  me,  I 
comply  with  some  trepidation,  because  I  have 
never  myself  had  the  experience  of  the  factory. 
But  I  have  taken  part  in  administration  on  a  large 
scale  and  on  a  small ;  and  there  is  something 
to  be  learnt,  even  about  works  management, 
from  the  larger  experience  of  life  and  the  study 
of  the  necessary  relations  between  men  and 
things,  which  not  every  works  manager  has 
found  out  for  himself.  At  any  rate  I  will  try  to 
make  some  suggestions  for  your  consideration, 
with  regard  to  certain  matters  which  will  have 
been  within  the  experience  of  every  one  among 
you.1 

1  It  is  not  easy  to  suggest  any  books  dealing  generally  with  the 

subject  of  this  address.     Some  hints  may  be  gleaned  from  such  books 

as  The  Library  of  Factory  Management,  6  volumes,   published  by 

the  A.  W.  Shaw  Company  of  Chicago,  1915  ;  Profit  Making  in  Shop 

1  B 


2      THE  WORKS  MANAGER  TO-DAY 


THE   FUNCTION   OF  MANAGEMENT 

FIRST  let  me  remind  you  that  you  belong  to  a 
brain-working  profession,  just  as  much  so  as  the 
lawyer  or  the  doctor,  the  architect  or  the  engineer, 
though  your  vocation  is  only  now  becoming 
conscious  of  itself  as  a  distinct  profession,  the 
profession  of  management.  The  function  of  the 
manager  or  superintendent  in  an  industrial  con- 
cern— we  need  not  for  the  moment  discriminate 
between  the  different  grades  of  management — is 
plainly  something  different  from  that  of  the 
craftsman,  labourer,  or  machine- operator :  it  is 


and  Facio.  y  Management,  1908  ;  Principles  of  Industrial  Engineering, 
by  Charles  B.  Going,  1911  ;  Principles  of  Industrial  Organisation, 
by  D.  S.  Kimball,  1913  ;  Works  Management,  by  W.  D.  Ennis,  1911  ; 
Principles  of  Industrial  Management,  by  J.  C.  Duncan,  1911  ;  The 
Factory  Manager  and  Accountant,  by  H.  Roland,  431  pp.,  1903  ;  The 
Works  Manager's  Handbook,  by  W.  S.  Button,  444  pp.,  1907  (first 
published  in  1890) ;  Organising  a  Factory,  by  0.  F.  Woods,  156  pp., 
1905  ;  Factory  Organisation  and  Administration,  by  H.  Diemer,  317 
pp.,  1910  ;  and  the  newest  treatise,  The  Administration  of  Industrial 
Enterprise,  with  Special  Reference  to  Factory  Practice,  by  Edward  D. 
Jones,  442  pp.,  1917.  But  I  am  afraid  that  these  works  are  written 
mainly  from  a  different  standpoint,  principally  with  a  view  to 
American  experience  and  practice,  and  relating  more  to  buildings, 
plant,  and  machinery  than  to  psychological  problems.  Something 
may  be  gained  from  the  Proceedings  of  the  Conference  of  Employment 
Managers  of  Boston,  Mass.  (Bulletin  202  of  U.S.  Bureau  of  Labor 
Statistics,  1916).  Books  on  specific  subjects  are  referred  to  on 
subsequent  pages. 


THE  FUNCTION  OF  MANAGEMENT      3 

not  his  business  actually  to  make  the  product 
with  his  own  hands.  Nor  is  it  the  same  as 
that  of  the  inventor,  whether  in  mechanics  or 
chemistry,  in  metallurgy  or  electricity ;  or  that 
of  the  designer  or  draughtsman,  who  adapts  the 
invention  or  the  plan  to  the  material  available 
and  the  product  desired.  Moreover,  the  function 
of  the  works  manager  ought  not  to  be  that  of 
the  buyer  of  materials,  components,  or  stores, 
for  which  there  should  be  a  separate  Purchasing 
Department,  any  more  than  it  is  that  of  finding 
a  market  for  the  products  of  the  enterprise, 
whether  this  is  done  by  advertising,  by  com- 
mercial travelling,  by  a  special  selling  agency, 
or  exclusively  by  obtaining  orders  and  entering 
into  contracts  at  the  head  office.1  Equally 
separate  is  the  whole  work  of  the  clerical  and 
accounting  staff.  What  we  are  concerned  with 
here,  whether  we  are  considering  any  grade  of 
managers  or  superintendents,  is  the  quite  distinct 
profession  of  organising  men — of  so  arranging 
and  directing  the  activities  of  a  band  of  producers, 

1  The  "Sales  Manager,"  for  whom  an  association  has  been  formed 
lately  in  London,  has,  of  course,  entirely  different  functions  from 
those  which  are  herein  dealt  with.  There  is  in  Great  Britain  a 
flourishing  Association  of  Colliery  Managers,  and  an  ably  conducted 
Institute  of  Gas  Engineers,  both  of  which  appear  to  be  Associations 
of  Professional  Managers  in  their  respective  industries  (see  the 
Supplements  on  "  Professional  Associations,"  issued  with  The  New 
Statesman  of  14  and  21  April  1917). 


4      THE  WORKS  MANAGER  TO-DAY 

including  both  brain- workers  and  manual  workers, 
as  to  create  among  them  the  most  effective  co- 
operation of  their  energies  in  achieving  the 
common  purpose.  What  the  manager  has  princi- 
pally to  handle,  therefore,  is  not  wood  or  metal, 
but  human  nature ;  not  machinery,  but  will.  I 
beg  you  to  think  of  yourselves,  whatever  may 
have  been  your  training,  not  as  engineers  or 
cotton  manufacturers,  or  shipbuilders  or  paper- 
makers,  or  whatever  else  may  be  the  designa- 
tion of  your  employers,  but  as  professional 
managers,  charged  with  a  distinct  function  which 
all  of  you  have  in  common,  whatever  the  product 
that  you  are  concerned  to  turn  out,  namely,  the 
function  of  handling  human  nature  in  conjunc- 
tion with  machinery  and  materials  with  a  view 
to  its  perfect  co-operation  in  an  industrial  enter- 
prise; and  members  of  a  profession,  too,  which 
is  developing  a  technique  of  its  own,  as  yet  only 
beginning  to  be  described,  of  which  these  pro- 
fessionals alone  are  completely  masters. 

This  function  of  management,  which  is  needed 
as  soon  as  two  or  three  are  gathered  together  in 
a  common  task,  is  recognised  as  indispensable 
when  we  come  to  enterprises  in  which  numbers 
are  engaged.  In  large  establishments  it  demands 
the  undivided  attention,  not  only  of  one  person 
but  of  a  whole  class;  and  we  see  evolved  a 


THE  FUNCTION  OF  MANAGEMENT      5 

specialised  and  differentiated  hierarchy  of  fore- 
men and  departmental  superintendents  and 
managers  of  this  or  that  branch  of  work — a 
hierarchy  culminating  in  some  form  of  General 
Manager  or  Managing  Director,  and  reaching,  in 
some  cases,  a  high  degree  of  complexity.  Nor  is 
it  only  for  the  sake  of  the  profit-making  pro- 
prietors, who  still  so  often  control  our  factories 
and  our  industries,  and  still  so  often  intervene 
personally  in  their  administration,  that  manage- 
ment is  indispensable.  The  co-ordination  of 
energies  that  the  manager  secures,  that  efficiency 
in  production  which  is  his  object,  is  as  necessary 
when  the  proceeds  of  the  enterprise  are  shared 
exclusively  among  the  producers,  as  in  the  so- 
called  self-governing  workshop,  or  (as  in  the 
rapidly  increasing  development  of  State  or 
Municipal  or  Co-operative  production)  are  ap- 
propriated for  the  common  benefit  of  the  com- 
munity, as  they  are  when  they  enrich  the  private 
capitalist.  Management  is  involved  in  the 
avoidance  of  any  waste  of  human  effort. 

And,  just  as  a  manager  has  become  necessary 
for  every  enterprise  of  more  than  inconsiderable 
size,  so  we  can  confidently  predict  that,  unless 
the  world  reverts  to  individual  handicraft  pro- 
duction, he  will  remain  for  all  time  an  indis- 
pensable functionary,  whatever  may  be  the  form 


6      THE  WORKS  MANAGER  TO-DAY 

of  society.  Whether  the  factories  are  owned 
by  individual  proprietors  or  by  joint-stock  com- 
panies, by  gigantic  Trusts  or  by  the  Government 
of  the  State  ;  whether  industry  is  conducted  by 
private  employers,  or  by  State  Departments,  or 
by  municipalities,  or  by  Co-operative  Societies, 
or  even,  as  some  of  the  younger  thinkers  now 
propose,  by  the  Trade  Unions  developed  into 
National  Guilds ;  finally,  whether  the  net  pro- 
duct is  made  for  the  capitalists  or  is  in  one  or 
other  way  shared  among  any  particular  group 
of  producers  or  among  the  whole  community, 
that  expert  direction  and  co-ordination  of  the 
wills  and  energies  of  all  the  producers  which 
we  call  management  will  always  be  necessary. 
The  manager,  superintendent,  and  foreman  may 
have  what  designations  we  please ;  they  may 
be  selected  and  appointed  in  this  way  or  that; 
their  authority  may  be  enlarged  or  diminished 
as  their  duties  may  be  varied  ;  they  may  become 
to  a  lesser  or  a  greater  extent  "  profiteers,"  or 
be  exclusively  salaried  functionaries ;  but  they 
will,  we  may  be  quite  sure — like  the  conductor 
of  an  orchestra  —  henceforth  always  exist,  and 
always  have  their  function  in  industrial  enter- 
prise. In  my  own  opinion,  the  profession  of 
the  manager,  under  whatever  designation,  is 
destined,  with  the  ever  -  increasing  complication 


THE  FUNCTION  OF  MANAGEMENT      7 

of  man's  enterprises,  to  develop  a  steadily  in- 
creasing technique  and  a  more  and  more  special- 
ised vocational  training  of  its  own ;  and  to 
secure,  like  the  vocation  of  the  engineer,  the 
architect,  or  the  chemist,  universal  recognition 
as  a  specialised  brain -working  occupation.  I 
need  hardly  say  that  I  do  not  overlook  the 
importance  of  the  manager  having  also  a  pro- 
found acquaintance  with,  and  even  considerable 
manual  proficiency  in,  the  particular  mechanical, 
chemical,  or  electrical  technique  of  the  industrial 
operations  that  he  manages.  But  it  is  impera- 
tive that  he  should,  in  all  cases,  have  much 
more  than  this.  It  is,  in  fact,  just  this  addition 
to  the  qualifications  of  the  engineer,  the  chemist, 
or  the  electrician  that  makes  him  a  manager. 
And  in  view  of  the  continued  growth  of  Pro 
fessional  Associations  in  all  civilised  countries,1 
I  look  to  see  the  professional  managers  of  the 
various  services  (including  those  that  are  still 
run  as  profit  -  making  industries)  eventually 
organise  themselves  in  a  Professional  Associa- 
tion of  their  own,  perhaps  in  an  Institute  of 
Managers  like  the  Institute  of  Actuaries  or 
the  Royal  Institute  of  British  Architects,  with 
its  several  grades  of  membership ;  concerned 
with  the  progressive  development  of  its  own 

1  Ibid. 


8      THE  WORKS  MANAGER  TO-DAY 

technique ;  fostering  its  own  special  vocational 
training ;  succouring  the  needs  of  its  less 
fortunate  members;  and  standing  up,  in  its 
own  way,  for  the  special  interests  of  its  own 
rank  and  file,  and  the  status  and  dignity  of  the 
profession. 

I  have  said  that  the  profession  of  the  manager 
would  always  continue  to  exist,  whatever  may 
be  the  form  and  government  of  the  Social  Order. 
I  suggest  to  you  that,  with  increasing  knowledge 
and  education  among  men,  it  is  destined  to 
become  not  less,  but  progressively  more  im- 
portant in  the  world.  This  will,  I  think,  bew 
realised  to  be  inevitable  if  we  take  account  of 
two  things  :  first,  the  ever-increasing  magnitude 
and  complication  of  man's  operations,  in  in- 
dustrial production  as  in  other  forms  of  activity  ; 
and  secondly,  the  absolute  necessity,  wherever 
there  is  magnitude  and  complexity,  of  direction 
and  co-ordination,  if  a  large  part  of  the  effort 
of  those  concerned  is  not  to  be  wasted.  The 
spread  of  education  among  the  whole  people 
will  but  augment  the  scope  for  management. 
The  widest  possible  diffusion  of  musical  attain- 
ments does  not  diminish  either  the  necessity  for 
orchestral  conductors  or  their  numbers.  On  the 
contrary,  it  increases  both  their  numbers  and 
the  opportunities  for  the  exercise  of  their  func- 


THE  FUNCTION  OF  MANAGEMENT   9 

tion.  The  more  that  men  become  capable  of 
co-operation  in  enterprises  of  larger  and  larger 
scope,  and  of  greater  and  greater  complexity, 
the  more  indispensable  becomes  the  manager 
to  any  high  degree  of  efficiency  of  human 
effort. 

At  this  point,  we  come  to  a  word  which  is 
much  misunderstood.  What,  in  industrial 
administration,  do  we  mean  by  efficiency? 
Clearly,  the  most  efficient  industrial  concern  is 
not  necessarily  that  which  pays  its  manager  the 
highest  salary,  because  this  might  be  obtained 
at  the  cost  of  continually  "passing  the  divi- 
dend "  !  Equally  plain  is  it  that  we  cannot 
measure  the  efficiency  of  a  business  merely  by 
the  magnitude  of  the  profits  taken  by  the  share- 
holders or  other  proprietors,  because  these  might 
conceivably  be  enlarged  by  merely  withholding 
proper  salaries  from  the  managerial  staff,  which 
no  one  would  call  efficiency  ;  or  by  depriving 
the  manual  working  producers  of  part  of  their 
wages,  which  might  be  mere  cheating;  or  (as 
we  have  lately  so  often  seen)  by  temporarily 
getting  the  better  of  the  Government  or  the 
consumer  owing  to  a  fortuitous  position  of 
advantage,  which,  whatever  it  ought  to  be 
called,  is  certainly  not  a  measure  of  the  efficient 
management  of  the  factory.  The  fact  is,  that 


10    THE  WORKS  MANAGER  TO-DAY 

the  efficiency  of  a  works  manager  cannot  pro- 
perly be  gauged  by  his  employer's  profit  and 
loss  account.  As  every  works  manager  knows, 
profit  or  loss  depends  to  a  very  great  extent  on 
factors  outside  his  scope.  As  things  are  now 
organised,  in  all  profit-making  businesses  a  large 
part,  and  in  some  profit-making  businesses  the 
principal  part,  of  the  profitableness  or  other- 
wise, depends  on  the  buying  of  the  materials — 
the  owners  of  the  business  are  to  that  extent 
habitual  speculators  in  cotton  or  wheat  or  copper 
ore,  or  whatever  it  may  be.  Moreover,  with  the 
capitalist  system  under  which  we  continue  to 
leave  so  much  of  the  world's  supply,  all  business 
profits  depend  to  a  great  extent,  and  in  some 
businesses  to  a  predominating  extent,  upon  the 
"  state  of  the  market "  for  their  output,  and 
upon  the  organisation  of  selling,  and  the  energy 
and  skill  devoted  to  this  part  of  the  business. 
It  must  clearly  be  one  of  the  axioms  of  the 
works  managers'  profession  that  the  works 
manager  cannot  be  made  answerable,  and  must 
not  accept  complete  responsibility,  for  the  enter- 
prise being  conducted  at  a  profit  to  the  pro- 
prietors. He  cannot  control  the  capitalist 
operations  either  at  the  one  end  of  the  enter- 
prise or  at  the  other.  His  function  is  not 
speculative  buying  or  skilful  marketing.  He 


THE  FUNCTION  OF  MANAGEMENT  11 

can  only  get  the  materials,  whatever  their  cost, 
converted  into  the  product,  whatever  it  may 
fetch.  His  concern  is  thus  primarily  with  out- 
put, not  profit. 

And  the  output  at  which  the  works  manager 
aims  is,  of  course,  not  merely  aggregate  gross 
output  of  the  unit  of  production  that  he  happens 
to  control,  irrespective  of  the  size  of  the  staff. 
Nor  can  it  mean  simply  the  greatest  possible 
output  per  person  employed,  because — to  take 
an  extreme  case — it  would  not,  in  the  twentieth 
century,  be  considered  an  efficient  industrial 
enterprise  which  got  output  at  the  cost  of  life, 
even  of  the  humblest  members  of  the  staff. 
After  all,  the  very  object  with  which  the  world 
engages  in  industry  is  in  order  to  live.  We  do 
not  live  to  work,  but  work  to  live.  Conse- 
quently, the  efficient  manager  is  he  who  makes 
his  industry  efficient  in  quantity  and  quality  of 
product  in  comparison  with  the  human  efforts 
and  sacrifices  involved.  And  this  definition 
enables  us  to  remove  a  misunderstanding  which 
makes  many  people  averse  from  the  very  idea 
of  industrial  efficiency.  Not  poets  and  senti- 
mentalists only,  but  also  in  their  thoughtful 
moments  nearly  the  whole  wage-earning  class, 
and  a  great  many  people  of  cultured  leisure, 
resent  the  taking  for  an  ideal  of  any  such  "  low" 


12    THE  WORKS  MANAGER  TO-DAY 

thing  as  efficiency.  But  this  aversion  or  resent- 
ment is  a  mistake.  The  manager  has,  in  the 
last  analysis,  an  ideal  no  lower  and  no  more 
"Philistine"  than  that  of  the  most  Utopian 
poet.  We  must  all  live  ;  we  cannot  live  without 
work ;  and  we  all  really  wish  our  work  to  be 
as  efficient  as  possible  in  achieving  its  object, 
which  is  Life.  It  cannot  seriously  be  suggested 
that  anybody  wants  to  give  more  human  efforts 
and  sacrifices  for  a  given  product  than  is 
required — unless,  indeed,  he  means  more  of 
other  people's  efforts  and  sacrifices  in  place  of 
his  own  !  Thus,  the  works  manager  is  out  for 
fullness  of  life,  just  as  much  as  is  the  poet — only 
the  works  manager  has,  to  the  extent  of  his  own 
sphere,  to  get  the  means  of  any  fullness  of  life 
for  the  community  of  individuals,  instead  of 
merely  for  each  of  them.  This  is  not  to  say 
that  material  productions  are  the  only  things 
needful  to  life  or  to  welfare.  It  is  doubtless  true 
that  the  outcome  of  our  present  social  order  is 
enormously  to  overvalue  material  products,  and 
wealth  generally,  in  contrast  with  education  or 
culture,  or  spiritual  satisfactions.  Those  who 
protest  against  success  or  progress  being  measured 
in  terms  of  material  production  have  every  justi- 
fication for  their  protest.  Nevertheless,  apart 
altogether  from  the  need  for  other  things,  and 


THE  FUNCTION  OF  MANAGEMENT    13 

apart  altogether,  too,  from  the  desirability  of  a 
more  equitable  distribution  of  that  which  is  pro- 
duced, the  world  requires  material  production  in 
order  to  live,  and  requires  even  an  increase  of 
material  production  in  order  that  the  growing 
population  may  be  able  to  live  well.  \Ve  ought 
not  to  blame  or  to  criticise  the  works  manager,  or 
to  undervalue  his  function,  because  he  serves  only 
one  side  of  human  needs.  The  works  manager 
is  justified  in  aiming  at  increase  of  output,  so 
long  as  he  thereby  infringes  no  human  right. 
In  particular,  waste  profits  no  one  ;  and  industrial 
efficiency  means  the  avoidance  of  waste.  The 
objector  to  industrial  efficiency  sometimes  means 
that  he  grudges  the  effort  or  sacrifice  that  a  given 
process  demands,  or  hates  the  circumstances 
under  which  it  is  introduced.  The  wage-earner 
who  vaguely  dislikes  industrial  efficiency  usually 
means,  first,  that  he  very  properly  resents  being 
regarded  as  a  machine ;  secondly,  that  he  dis- 
approves of  the  use  that  is  now  made  of  industrial 
efficiency ;  and  thirdly,  that  he  naturally  objects 
to  any  change  in  his  daily  life  which  is  arbitrarily 
imposed  on  him.  It  is  one  of  the  primary 
difficulties  of  the  manager  to  disentangle,  in  his 
own  mind  and  in  those  with  whom  he  is  brought 
in  contact,  these  inevitable  misunderstandings 
of  industrial  efficiency  from  industrial  efficiency 


14     THE  WORKS  MANAGER  TO-DAY 

itself.  Whether  we  are  Socialists  or  Individu- 
alists, practical  men  or  idealists,  poets  or  poli- 
ticians, we  cannot  afford  to  see  industrial 
efficiency — in  its  real  sense — dislodged  or  dis- 
pensed with. 


II 

REDUCING  THE  COST  OF  PRODUCTION 

FROM  the  standpoint  of  the  economist,  the 
function  of  the  manager  is  to  promote  the 
efficiency  of  the  enterprise ;  or,  to  put  it  more 
shortly,  to  increase  its  net  productivity.  Civil- 
isation, so  far  as  it  is  real,  is  everywhere  at  war 
with  waste.  This  means,  to  put  it  summarily, 
reducing  the  cost  of  production.  Unless  every 
member  of  the  managerial  staff,  from  the 
humblest  foreman  up  to  the  directing  chief,  is, 
by  his  activities,  causing  the  cost  of  production 
to  be  less  than  it  would  be  were  he  not  at  work, 
he  is  a  parasite  living  on  the  labour  of  others, 
just  as  much  as  is  the  functionless  landowner  to 
whom  the  concern  pays  a  chief-rent  or  ground- 
rent,  or  a  feu-duty.  But  the  reduction  in  the 
cost  of  production  effected  by  management  must, 
to  be  justified,  be  a  genuine  decrease  of  cost — 
that  is  to  say,  a  reduction  of  the  human  efforts 

15 


16     THE  WORKS  MANAGER  TO-DAY 

and  sacrifices  required  per  unit  of  output — not 
merely  a  lowering  of  the  rate  of  wages  paid  to 
the  workmen.  As  things  now  are,  the  employer, 
whether  capitalist  or  Town  Council,  State  De- 
partment or  Co-operative  Society,  is  apt  to 
confuse  these  essentially  different  things.  At 
first  sight,  indeed,  it  seems  to  be  the  same  to 
the  Profit  and  Loss  Account  whether  the  re- 
duction in  the  outgoings  necessary  to  produce  a 
given  output  has  been  achieved  by  a  decrease  of 
the  human  efforts  and  sacrifices  involved — say 
by  stopping  some  waste,  by  eliminating  some 
useless  process,  and  by  economising  in  material 
or  stores — or  by  a  cut  at  wages,  for  un- 
diminished  work.  In  an  engineering  factory, 
for  instance,  reduction  in  cost  may  be  obtained 
by  introducing  more  automatic  or  semi-automatic 
machinery,  by  devising  more  suitable  plant  for 
the  work,  by  effecting  economies  in  fuel,  especi- 
ally as  regards  the  sources  of  power,  by  more 
extensive  application  of  jigs  and  fixtures,  by  the 
better  designing  of  machine  tools,  by  the  use  of 
mechanical  transport  for  moving  all  materials, 
components,  and  products,  by  improvements  in 
lighting  or  ventilation,  by  increasing  the  ease 
and  comfort  of  the  workers  in  their  toil,  and  by 
preventing  any  person  in  any  occupation  from 
ever  being  kept  waiting  for  anything  whatso- 


REDUCING  COST  OF  PRODUCTION    17 

ever.  All  this,  either  directly  or  indirectly, 
saves  human  effort  and  sacrifice.  The  cut  at 
wages,  on  the  other  hand,  is  not,  in  any  real 
sense,  a  reduction  in  the  cost  of  production, 
any  more  than  would  be  a  diminution  in  the 
manager's  salary,  or  a  halving  of  the  share- 
holders' dividends.  It  is  only  an  alteration  in 
the  way  in  which  the  proceeds  of  the  enterprise 
are  shared.  It  is,  in  itself,  like  the  effort  of  the 
burglar  or  the  forger,  of  no  social  or  economic 
advantage.  There  is,  so  the  economists  tell 
us,  practically  never  any  national  gain  in  a 
reduction  of  any  recognised  common  Standard 
Rate.  This  was  not  always  understood.  I  do 
not  know  whether  it  would  be  too  hard  to  say 
that  the  old-fashioned  capitalist  employer  of 
the  last  century  was  often  frankly  out  to  take 
advantage  of  the  weakness  of  any  one  with 
whom  he  came  in  business  contact ;  and  that 
he  would  cut  wages  whenever  he  thought  the 
workmen  would  stand  it  without  revolt,  with  as 
little  compunction  as  he  extorted  a  higher  price 
from  the  consumer  whenever  he  had  the  power 
to  do  so.  I  am  glad  to  think  that  this  is  now 
disavowed  by  reputable  private  employers,  just 
as  it  is  professedly  forbidden  in  any  public 
service.  If  it  were  the  function  of  the  manager 
to  assist  the  employer  in  such  conduct  the 

c 


18     THE  WORKS  MANAGER  TO-DAY 

manager  would,  side  by  side  with  the  employer, 
rank,  economically,  with  the  highwayman.  More 
precisely,  the  salaried  manager  would  be  com- 
parable to  the  stalwart  man-at-arms — quite  a 
respectable  personage  of  the  time — whom  a 
Robber  Baron  on  the  Rhine  used  to  employ  at 
a  fixed  remuneration  to  sally  forth  from  his 
castle  to  levy  his  dues  on  the  passing  merchants. 
But  such  conduct  is,  from  the  standpoint  of 
efficiency,  worse  than  a  crime,  because  it  is  a 
blunder.  We  cannot,  at  present,  in  most 
industries,  prevent  the  owner  of  the  business 
from  interfering  with  the  rates  of  wages,  subject 
to  the  law  of  the  land,  and  to  the  revolts  that 
he  provokes.  But  the  professional  manager  who 
knows  his  job  realises  that  to  pay  less  than  the 
recognised  Standard  Rate,  or  to  cut  piecework 
rates,  or  reduce  bonus  times,  or  in  any  way  to 
"nibble"  at  wages,  is  about  the  very  worst  thing 
he  can  do,  if  lie  wishes  to  achieve  the  minimum 
cost  of  production.  It  is  not  merely  that  such 
a  policy  means  that  he  gradually  gets  the  most 
irregular,  the  least  skilful,  and,  on  the  whole, 
the  least  trustworthy  labour  in  the  particular 
industry,  instead  of  being  able  to  pick  the 
best.  What  is  worse,  it  inevitably  provokes  the 
reprisals  of  "ca'  canny."  Over  the  industry, 
the  establishment,  or  the  manager  making  this 


REDUCING  COST  OF  PRODUCTION     19 

fundamental  mistake  there  hangs  perpetually  the 
curse  pronounced  on  Mount  Ebal,  "  Cursed  be  he 
who  remove th  his  neighbour's  landmark."  There 
can  be  no  genuine  industrial  efficiency,  and 
certainly  no  real  reduction  in  costs,  where  a 
sullen  hostility  or  suspicion  leads  every  work- 
man to  keep  his  output  down  to  just  enough 
to  escape  dismissal.  I  cannot  stop  here  to 
characterise  as  I  should  wish  to  do  the  funda- 
mental impolicy  and  the  social  injury  involved 
in  these  reprisals  of  "ca'  canny."  I  have  here 
nothing  to  do  with  the  shortcomings  or  delin- 
quencies of  the  manual  workers,  any  more  than 
with  those  of  the  landlords  or  the  legislators. 
I  can  only  say  that  "ca'  canny"  is  so  grave  a 
social  evil  that  any  manager  who,  by  negligence 
or  heedlessness,  provokes  such  reprisals — as  a 
careless  man  might  fire  the  heather  or  disseminate 
enteric — may  one  day  come  to  be  dealt  with 
professionally.  By  the  authority  of  Parliament 
the  General  Medical  Council  strikes  off  the 
register  any  doctor  found  guilty  of  "  infamous 
conduct  in  a  professional  respect,"  as  the  Council 
has  defined  it.  I  can  imagine  that  the  future 
Professional  Association  of  Managers  might  quite 
well  come  to  regard  as  guilty  of  "infamous 
conduct  in  a  professional  respect"  (entailing 
censure,  and  even  exclusion  from  the  profession) 


20     THE  WORKS  MANAGER  TO-DAY 

any  manager  who  is  found  to  commit  the  pro- 
fessional folly  of  seeking  a  reduction  of  cost  of 
production  by  "  cutting "  rates  or  lowering  the 
Standard  Wage.  But  to  this  important  subject 
I  shall  return. 


Ill 

APPOINTMENTS   AND   DISMISSALS 

THE  practice  of  industrial  establishments  in 
taking  workmen  into  their-  service  seems  to  vary 
enormously  even  in  the  same  trade.  At  one  end 
of  the  scale  we  see  a  foreman  summarily  picking 
out  this  man  or  that  from  a  surging  crowd  at 
the  factory  gates.  At  the  other  end  we  have 
all  the  appointments,  even  of  labourers,  made 
after  elaborate  enquiries  by  a  special  "  Employ- 
ment Department,"  or  by  one  of  the  partners 
in  the  firm,  or  by  a  manager  in  high  position, 
specially  deputed  for  this  duty.  In  the  one 
case  (leaving  out  of  account  the  brutality  of  the 
procedure,  and  the  serious  injury  to  the  com- 
munity that  it  causes,  of  which,  usually,  the 
manager  is  quite  unaware)1  the  assumption 
seems  to  be  that  one  man  will  do  as  well  as 

1  Naturally,  I  am  not  oblivious  of  the  difficulties  presented  by  the 
varying  amount  of  work  to  be  done,  or  by  seasonal  trades  ;  but  the 
resort  to  casual  labour  must  be  recognised  as  always  involving  a  loss 
21 


22     THE  WORKS  MANAGER  TO-DAY 

another ;  that  character  and  conduct  are  of  no 
consequence  in  "  mere "  workmen ;  and  that  a 
staff  which  is  a  constantly  shifting  congeries  of 
atoms  will  be  as  efficient  in  production  as  one 
which  is  an  organic  whole.  I  need  not  tell 
you  that  these  assumptions  are  fundamentally 
erroneous.  It  may  seem  unimportant  what  sort 
of  labourer  is  taken  on  for  a  simple  job  of  load- 
ing or  unloading,  fetching  and  carrying.  But 
the  simplest  job  can  be  done  more  or  less  honestly 
and  more  or  less  efficiently ;  and  even  one  man 
has  his  effects,  for  good  or  for  evil,  on  all  with 
whom  he  comes  in  contact.  Moreover,  the  whole 
staff  is  made  up  of  individuals ;  and  what  the 
whole  staff  will  be,  and  how  it  will  work,  depends, 
very  largely,  on  how  each  person  is  selected.1 

of  efficiency,  and  therefore  as  an  expedient  to  be  as  far  as  possible 
minimised.  So  easy  has  it  usually  been  to  take  on  casual  labour, 
that  I  do  not  feel  assured  that  managers  have  hitherto  given  all  the 
heed  that  they  might  have  done  to  securing  continuity  of  production, 
and  therefore  of  employment. 

See,  on  this  point,  Unemployment,  by  W.  H.  Beveridge,  and  The 
Prevention  of  Destitution,  by  S.  and  B.  Webb  (1911,  Longmans,  6s.). 

1  Workmen  will  sometimes  urge  objections  to  any  elaborate  enquiry 
before  a  man  is  taken  on  ;  and  will  occasionally  claim  that  an  em- 
ployer has  nothing  to  do  with  anything  but  their  technical  proficiency. 
But  it  is  really  a  rise  in  the  status  of  the  manual  worker  to  treat  him, 
in  this  respect,  exactly  as  we  treat  a  clerk  or  a  manager.  He  must 
cease  to  be  engaged  as  a  "  hand,"  to  be  taken  on  and  dropped  at  an 
hour's  notice,  just  as  it  suits  the  employer's  convenience,  and  must 
receive  an  appointment  as  a  responsible  member  of  an  establishment, 
in  which  a  durable  relationship  is  contemplated. 

On  the  other  hand,  the  minute  inquisition  into  the  candidate's 


APPOINTMENTS  AND  DISMISSALS    23 

In  the  United  States,  where  the  methods  of 
"  hiring  and  firing  "  have  often  been  much  more 
summary  and  ruthless  than  those  to  which  we 
are  accustomed  in  Great  Britain,  the  excessive 
"turnover"  of  labour  thereby  produced  is  be- 
coming more  and  more  recognised  as  a  serious 
drawback  to  industrial  efficiency.  The  building 
up  of  the  right  kind  of  staff,  its  retention  in  the 
service  once  it  has  been  secured,  and  its  skilful 
recruiting  from  year  to  year,  constitute,  in  fact, 
one  of  the  most  important  elements  in  manage- 
ment. It  is  hard  to  make  a  foreman  understand 
that,  though  one  demoralised  workman  may  not 
make  much  difference  to  the  net  productivity 
(though  every  little  tells),  the  difference  between 
a  whole  staff  of  demoralised  workmen  and  a 
whole  staff  of  carefully  chosen  workmen  may 
amount,  in  a  year,  to  ever  so  much  more  than 
the  salary  even  of  the  General  Manager  himself. 
Now,  any  careful  and  systematic  organisation 
of  the  engaging  of  workmen  necessarily  involves 
the  abandonment  of  "patronage"  by  foremen 
or  managers.  Most  people  like  power,  even  in 
small  matters,  and  the  opportunity  of  doing 

private  life,  his  savings,  his  church-going,  his  recreations,  and  his 
family  relationships — in  which  some  British  employers  are  beginning 
to  copy  American  practice — constitutes  an  unjustifiable  invasion  of 
privacy  ;  and  is  unwarranted  whether  the  appointment  to  be  filled  be 
that  of  manager  or  labourer. 


24    THE  WORKS  MANAGER  TO-DAY 

favours  and  bestowing  benefits,  especially  when 
not  at  their  own  cost !  It  is  obvious  that 
efficiency  (and  also  justice)  demands  that  for 
every  vacancy,  high  or  low,  the  best  available 
man  shall  be  selected,  irrespective  of  whether  or 
not  he  is  related  to  a  foreman,  or  is  a  friend  of 
his,  or  a  friend  of  his  friend,  or  a  public-house 
acquaintance.  Anything  else  is  jobbery  ;  and  it 
is  worth  remembering  that,  in  the  Great  Britain  of 
to-day,  this  is  one  of  the  ways  in  which  private 
enterprise  is  still  disgraced.  It  is  a  demonstrable 
fact  that  jobbery,  in  this  sense,  is,  in  Great  Britain 
at  any  rate,  more  prevalent  in  private  business 
than  it  is  in  municipal  affairs,  and  more  pre- 
valent even  in  municipal  affairs  than  in  Govern- 
ment Departments.  This  is  particularly  the 
case  with  regard  to  the  better  paid  and  socially 
more  desirable  appointments,  which,  in  private 
businesses,  are  still  subjected  to  the  claims  of 
family  relationship  to  an  extent  now  unknown 
in  the  public  service.  It  is  one  of  the  first 
duties  of  the  professional  manager  to  put  a 
stop  to  jobbery,  even  with  regard  to  the 
humblest  situations.  Of  course,  there  are  lower 
depths  than  a  simple  favouritism.  Unless  all 
appointments  are  centralised  and  systematically 
scrutinised  there  may  easily  be  bribery,  and 
the  levying  by  foremen  of  what  is  virtually 


APPOINTMENTS  AND  DISMISSALS    25 

blackmail,  with  all  sorts  of  insidious  degradation 
of  the  staff. 

I  cannot  believe  that  what  I  may  call  the 
system  of  trial  and  error  is  the  best  way  of 
choosing  workmen.  To  take  on  a  man  at  the 
gate,  who  says  he  possesses  such  and  such  skill 
and  then  to  put  him  to  work  under  the  foreman's 
eye — the  foreman  "  firing  "  him  after  a  few  hours 
because  he  is  not  skilful  enough,  and  then  taking 
on  another  man  in  the  same  way — this  does  not 
seem  a  scientific  or  a  civilised  way  of  recruiting 
a  staff.  Even  with  respect  to  technical  efficiency 
there  must  be  better  ways  of  choosing  men  than 
this,  though  it  is  beyond  my  competence  to  name 
them. 

There  is,  I  need  hardly  say,  more  to  be  con- 
sidered in  making  an  appointment  than  the  mere 
technical  proficiency  of  the  candidate.  If  you 
are  picking  a  man  to  form  part  of  your  staff, 
you  need  to  consider  what  will  be  his  personal 
influence  on  those  with  whom  he  comes  in  contact. 
It  is  plainly  vital  to  consider  whether  his  admission 
is  likely  to  raise  or  to  lower  the  total  efficiency 
of  the  workshop ;  and  this  depends  to  no  small 
extent  on  its  "tone."  It  may  seem  a  counsel 
of  perfection,  but  I  do  not  see  how  we  can  escape 
from  the  inference  that  if  we  are  aiming  at 
perfect  industrial  efficiency,  it  is  important  to 


26     THE  WORKS  MANAGER  TO-DAY 

take  the  same  sort  of  trouble  in  selecting  artisans 
and  labourers  and  in  retaining  them  once  they 
are  selected,  and  in  keeping  them  in  a  cordial 
and  satisfied  state  of  mind,  as  we  already  do 
with  regard  to  clerks  and  managers.  Moreover, 
there  is  a  further  consideration.  It  is  not  only 
what  a  man  may  do  to  the  other  workmen  that 
is  important,  but  also  what  the  other  workmen 
may  do  to  him.  The  existing  staff  has  some 
claim  to  have  its  feelings  respected,  as  regards 
those  who  are  set  to  work  among  them  in  close 
personal  companionship.  It  may  seriously  inter- 
fere with  efficiency  if  a  man  or  a  woman  is 
brought  in  against  whom  there  is,  for  any  reason, 
a  strong  feeling  of  antagonism  or  disapproval, 
whether  this  feeling  is  based  on  religious  or 
racial  prejudice  or  jealousy,  or  on  personal 
character  or  conduct.  It  is  simply  courting 
trouble  to  impose  a  notorious  non-unionist  on 
a  strongly  union  shop.  It  is  simply  ruination 
to  a  female  staff  to  introduce  workers  irrespective 
of  their  personal  character.  In  the  same  way, 
it  is  necessary  to  keep  a  constant  watch  on 
foremen  and  subordinate  managers,  in  order 
promptly  to  detect  the  existence  of  any  feelings 
of  anger  or  hostility  or  unpopularity  that  they 
arouse  among  those  who  are  subject  to  them. 
The  perfect  foreman  or  manager  will  know  how 


APPOINTMENTS  AND  DISMISSALS    27 

to  do  his  duty  with  all  due  strictness,  but  with 
such  obvious  impartiality  and  fairness,  and  such 
genuine  courtesy  and  kindliness — in  short,  with, 
in  the  best  sense,  such  good  manners — that  he 
will  be  respected  and  liked  by  the  workshop.  We 
cannot  all  attain  such  perfection.  But  it  remains 
true  that  a  foreman  or  manager  who  is  seriously 
disliked,  from  whatever  cause,  has  a  very  lower- 
ing effect  on  efficiency ;  and  he  had  better  be 
moved  and  warned.  Which  large  establishment 
will  be  the  first  to  start  a  school  for  foremen  ? 
It  would  be,  very  largely,  a  school  of  manners. 

Similar  considerations  apply,  of  course,  to 
dismissals.  What  workmen  nowadays  resent 
more  than  anything  else  is  the  capricious  tyranny 
to  which  they  are  still  often  subjected,  very 
largely  by  foremen,  but  sometimes  by  managers 
and  by  employers  themselves.  I  am  afraid  that 
most  business  enterprises  of  any  magnitude  are 
here  sadly  at  fault.  Lest  I  should  be  supposed 
to  be  merely  imagining  what  goes  on  in  many  a 
great  factory  in  the  United  Kingdom,  or  to  be 
taking  a  biassed  or  an  exaggerated  view,  I  will 
quote  here  the  recent  testimony  of  an  English 
engineering  employer. 

In  most  works,  in  the  engineering  trade  at  least,  the 
whole  industrial  life  of  a  workman  is  in  the  hands  of  his 
foreman.  The  foreman  chooses  him  from  among  the 


28     THE  WOKKS  MANAGER  TO-DAY 

applicants  at  the  works  gate ;  often  he  settles  what  wages 
he  shall  get ;  no  advance  of  wage  or  promotion  is  possible 
except  on  his  initiative ;  he  often  sets  the  piece-price  and 
has  power  to  cut  it  when  he  wishes ;  and,  lastly,  he  almost 
always  has  unrestricted  power  of  discharge.  These  great 
powers  are  exercised  by  men  chosen  generally  for  their 
energy  and  driving  power.  They  are  usually  promoted 
workmen,  with  no  very  marked  superiority  in  education, 
outlook,  or  sympathy  over  those  whom  they  command.  It 
is  not  surprising,  therefore,  that  these  powers  are  often 
abused;  and  a  tyranny,  both  in  matters  of  detail  and 
principle,  established,  which  the  higher  management,  even 
if  it  has  the  desire,  has  very  little  power  to  soften  or 
control.  The  most  glaring  case  of  this  is  usually  in 
connection  with  discharge.  The  workman  may  be  told  by 
the  foreman  at  a  moment's  notice  that  he  is  no  longer 
wanted.  If  the  department  is  obviously  short  of  work, 
this  is  accepted  generally  with  remarkably  good  grace,  but 
the  discharge  may  just  as  likely  be  the  result  of  "  words  " 
with  the  foreman,  and  in  that  case  will  almost  certainly 
be  felt  to  be  an  act  of  spite  or  revenge,  and  be  resented 
accordingly.  The  workman  has  no  court  of  appeal  against 
the  edict ;  it  is  almost  impossible  for  him  to  get  past  the 
foreman  to  see  the  manager  or  a  director,  and  even  if  he 
should  succeed,  the  management  has  practically  no  choice 
but  to  back  up  its  agent.  To  support  the  workman  against 
the  decision  of  the  foreman  would  generally  lead  to  the 
resignation  of  the  latter,  whose  value  to  the  firm  is  con- 
siderably higher  than  that  of  any  individual  workman,  and 
whose  loss  cannot  be  lightly  faced.1 

1  "Industrial  Reconstruction:   an  Employer's  View,"  The  Athe- 
nceum,  March  1917. 


APPOINTMENTS  AND  DISMISSALS    29 

I  hope  that  neither  this  candid  employer  nor 
I  will  be  supposed  to  be  bringing  an  indictment 
against  all  foremen,  many  of  whom  are  recognised 
by  the  workmen  themselves  to  be  fair-minded 
men,  striving  to  do  justice  in  a  very  difficult 
situation.  Nor  need  we  be  supposed  to  be  oblivi- 
ous of  the  manifold  faults  and  deficiencies  of  the 
workmen.  Equally  do  we  see  many  employers 
and  managers  striving  constantly  for  justice  and 
humanity.  My  object  here  is  to  ask  every 
manager  within  my  reach  what  organisation 
there  is  in  his  works,  what  steps  he  has  himself 
taken,  to  prevent  the  possibility  of  misuse  by 
the  foremen  of  the  very  great  powers  with  which 
they  are  nearly  always  entrusted.  It  is,  I  venture 
to  say,  one  of  the  imperative  duties  of  a  manager 
to  contrive  some  system  by  which  this  power — 
which  we  know  is  always  liable  to  misuse — is 
automatically  prevented  from  developing  into 
tyranny. 

On  the  particular  point  of  the  power  of  dis- 
missal, I  cannot  help  doubting  whether — apart, 
perhaps,  from  the  summary  termination  of  the 
first  day's  probation  of  a  new  workman — this 
should  ever  be  exercised,  at  any  rate  so  far  as 
concerns  what  may  be  called  an  established 
member  of  the  staff  (however  low  may  be  his 
wage),  by  any  one  in  less  authority  than  one 


30     THE  WORKS  MANAGER  TO-DAY 

of  the  principals  of  the  firm,  or  by  the  manager 
himself.  So  heavy  a  penalty  as  the  dismissal 
of  a  workman  (involving  to  him  a  serious  dis- 
location of  his  life,  the  perils  and  demoralisation 
attendant  on  looking  for  work,  probably  the 
uprooting  of  his  home  and  the  interruption  of 
his  children's  schooling,  possibly  many  weeks 
of  penury  or  semi-starvation  for  his  family  and 
himself)  ought  to  be  regarded  as  a  very  serious 
matter.  No  man  ought  to  be  dismissed  by 
reason  of  anything  personal  to  himself,  except 
after  a  formal  enquiry,  and  for  a  definite  cause, 
against  which  he  must  be  allowed  an  opportunity 
for  explanation  or  defence.  No  foreman  or  sub- 
ordinate manager  ought  to  be  allowed  to  exercise 
the  power  of  dismissal.  There  must,  of  course, 
be  power  of  instant  suspension  and  report,  to 
be  confirmed  or  not,  after  formal  enquiry,  by 
the  manager  or  partner  to  whom  this  important 
duty  is  specially  assigned. 

In  some  establishments,  where  the  owners 
attempt  to  be  humane,  it  is  sought  to  protect 
the  workmen  against  injustice  by  letting  it  be 
known  that  they  have  full  rights  of  appeal  to 
the  management,  or  to  the  individual  partners, 
against  any  dismissal  or  disciplinary  punishment 
by  a  foreman  or  assistant  manager.  This  is 
kindly  meant,  but  it  is  not  effective,  and  it  leads 


APPOINTMENTS  AND  DISMISSALS    31 

to  difficulties.  Discipline,  and  the  foreman's 
authority,  must  be  maintained.  Once  a  fore- 
man has  pronounced  sentence,  even  the  most 
just  and  most  humane  employer  finds  great 
difficulty  in  throwing  him  over.  The  workman, 
by  appealing,  may  show  that  he  was  not  himself 
to  blame,  and  that  the  foreman  was  hasty  or 
ill-tempered,  or  even  prejudiced ;  but  what  is 
the  employer  to  do?  To  let  the  man  win  his 
appeal,  to  pronounce  to  the  whole  workshop 
that  the  foreman  was  wrong — in  short,  to  do 
justice — seems  to  involve  the  permanent  weaken- 
ing of  the  foreman's  authority,  the  discouragement 
of  his  efforts  to  promote  the  interests  of  the 
concern,  friction  in  the  shop,  and  the  destruction 
of  discipline.  What  happens,  I  fear,  is  that, 
except  in  exceptionally  glaring  cases,  the  case 
is  regarded  as  an  inextricable  tangle,  the  fore- 
man is  given  the  benefit  of  the  doubt,  and  the 
sentence  of  dismissal  is  confirmed.  If  the 
workman  is  meritorious,  and  the  employer  is 
kind,  an  effort  may  be  made  to  find  him  a  place 
elsewhere ;  and  the  foreman  is  privately  warned 
not  to  do  it  again.  But  the  foreman's  authority 
is  almost  invariably  upheld. 

This  shows  that  subsequent  appeal  against 
the  foreman's  sentence  is  not  the  right  device. 
What  is  required  is  something  like  the  procedure 


32     THE  WORKS  MANAGER  TO-DAY 

adopted  in  some  other  enterprises,  which  we 
may  call  that  of  prior  confirmation  of  any 
sentence  of  dismissal  before  it  is  promulgated. 
There  ought,  it  is  clear,  to  be  a  very  definite 
code  of  procedure  as  to  dismissals.  A  foreman 
may  summarily  suspend  a  workman,  or  he  may 
warn  him  ;  but  the  foreman  must  not  go  beyond 
this  under  any  circumstances  whatsoever  until 
he  has  submitted  the  case  privately  to  the 
manager,  who  goes  into  it  as  he  thinks  fit, 
probably  summoning  the  workman  before  him. 
The  essential  thing  is  that  whatever  decision 
is  arrived  at  is  announced  by  the  foreman  as 
his  own.  He  is  thus,  in  the  eyes  of  the  work- 
shop, never  overruled. 

Even  when  workmen  have  to  be  put  off  from 
slackness  of  business  (a  slackness  resulting  from 
the  failure,  be  it  remembered,  not  of  the  work- 
men but  of  the  management;  it  may  be  an 
unavoidable  failure,  but  it  is  to  be  regarded 
nevertheless  as  a  failure  to  secure  the  first 
requisite  of  maximum  efficiency,  namely  con- 
tinuity of  running)  the  matter  ought  not  to  be 
lightly  treated.  Prior  notice  should  be  given 
to  the  Employment  Exchange  of  any  projected 
reduction  of  staff.  The  longest  possible  notice 
ought  to  be  given  to  the  workmen  about  to  be 
put  off;  attempts  should  be  made  to  find  them 


APPOINTMENTS  AND  DISMISSALS    33 

employment  in  other  departments ;  and  if  these 
fail,  the  very  least  consideration  to  be  shown 
is  a  clear  week's  notice  (or  a  week's  pay  in  lieu 
of  notice).  Depend  upon  it,  the  manager  who 
neglects  this  sort  of  consideration  —  perhaps 
thinks  himself  clever  in  turning  off  "hands" 
with  as  little  expense  or  trouble  to  the  firm  as 
turning  off  the  gas — does  not  know  his  business. 
He  may  think  he  does  very  well,  but  (such  is 
the  human  nature  which  he  has  to  handle)  he 
will  inevitably  fail  either  to  maximise  output 
or  to  minimise  cost.  This  is  coming  to  be  in- 
creasingly recognised  in  the  United  States.1 

1  See  the  Proceedings  of  the  Conference  of  Employment  Managers' 
Association  of  Boston,  Mass.  (Bulletin  202  of  U.S.  Bureau  of 
Statistics  of  Labor,  1916). 


IV 

THE  RECOGNITION  OF  TRADE  UNIONISM 

I  SUPPOSE  that  I  do  not  need  to  make  clear  to 
you  that  workmen  have  a  perfect  right  to 
combine  to  defend  or  improve  their  economic 
position  ;  and  that  no  employer  is  justified  in 
resenting  such  combination.  The  employer  or 
the  manager  who,  in  these  days,  takes  up  an 
attitude  of  hostility  to  Trade  Unionism  is  really 
cutting  his  own  throat.  He  may  appear  to  win 
a  triumph,  and  summarily  to  suppress  any 
incipient  combination  among  his  "hands." 
There  are,  indeed,  still  some  occupations,  in 
some  districts,  even  in  Great  Britain,  in  which 
Trade  Unionism  is  unknown ;  and  others  in 
which  it  is  still  feeble.  Thus,  it  is  often  quite 
possible  for  establishments  to  go  on,  even  (as 
they  think)  prosperously,  on  a  policy  of  sup- 
pression of  Trade  Unionism.  We  may  remember 
how  the  wicked  were  said  to  flourish  like  a 

34 


RECOGNITION  OF  TRADE  UNIONISM   35 

green  bay  tree.  But  it  may  confidently  be 
asserted  that  although  such  establishments  may 
make  profit,  they  will  never  achieve  the  maximum 
of  productive  efficiency.  All  they  can  ask  for 
is  slave  labour;  and,  in  nearly  all  cases,  that 
is  all  they  get ! 

Apart  from  these  low-grade  and  exceptional 
industries,  I  suppose  I  shall  nowadays  find 
general  concurrence  when  I  emphasise  the  im- 
perative necessity  for  industrial  efficiency  of  a 
full  and  cordial  recognition  of  Trade  Unionism 
as  soon  as  it  appears  among  the  employees.  I 
am  afraid  that  the  earlier  types  of  manager  were 
often  as  ignorant  and  as  stupid  on  this  point  as 
the  old-fashioned  employer  of  the  early  part  of 
the  last  century,  who  would  no  more  dream  of 
negotiating  with  a  Trade  Union  official  claiming 
to  represent  the  workpeople  employed  than  he 
would  have  recognised  a  representative  of  his 
horses.  Although  Trade  Unionism  has  not  yet 
made  good  its  footing  in  all  trades  in  all  parts 
of  the  country,  especially  in  certain  districts 
among  women,  and  among  the  agricultural 
labourers  and  men  of  nondescript  occupation, 
yet  its  position  is  now  so  firmly  established  in 
Great  Britain,  its  advantages  are  by  every 
section  of  the  wage-earning  class  so  thoroughly 
believed  in,  and  its  necessity  for  the  economic 


36     THE  WOKKS  MANAGER  TO-DAY 

security  of  the  wage-earner's  Standard  of  Life  is 
by  the  economists  so  completely  demonstrated, 
that  no  professional  manager  has  nowadays  any 
excuse  for  hesitation  or  doubt.1  A  Trade  Union 
is  often,  especially  in  its  incipient  stages,  very 
imperfectly  organised  ;  its  officials  are  frequently 
very  far  from  possessing  either  the  knowledge  or 
the  statesmanship  required  for  their  difficult  task; 
but  where  any  sort  of  Trade  Unionism  exists,  it 
is  only  "asking  for  trouble"  for  a  manager  to 
flout  any  organisation  which  even  a  minority  of 
the  workmen  have  chosen  to  create.  Whatever 
time  may  be  taken  up  by  the  Trade  Union 
official,  by  the  grievances  that  he  brings  forward 
or  by  the  interviews  that  he  demands,  depend 
upon  it  there  will  be,  sooner  or  later,  still  greater 
difficulties,  if  the  management  takes  up  the  old- 
fashioned  attitude  of  declaring  that  it  will  "  deal 
only  with  its  own  employees."  Such  an  atti- 
tude cannot  be  intellectually  justified.  For  the 

1  Every  manager  ought  to  understand  Trade  Unionism,  its  history, 
its  objects  and  methods,  and  its  present  organisation.  The  books  to 
be  read  are:  The  History  of  Trade.  Unionism  (7s.  6d.),  Industrial 
Democracy  (12s.  6d.),  The  Restoration  of  Trade  Union  Conditions, 
1917  (Is.),  and  Problems  of  Modern  Industry  (6s.),  by  S.  and  B. 
Webb;  Trade  Unionism,  by  C.  M.  Lloyd  (2s.  6d.);  The  World  of 
Labour  (2s.  6d.) ;  Trade  Unionism  on  the  Railways  (Is.),  and  Labour 
in  War  Time  (2s.),  by  G.  D.  H.  Cole;  National  Guilds,  edited  by 
A.  R.  Orage,  and  the  Labour  Year -Book  for  1916  and  1917  (2s.  6d.). 
All  these  books  can  be  obtained  at  the  Fabian  Bookshop,  25  Tothill 
Street,  Westminster. 


RECOGNITION  OF  TRADE  UNIONISM   37 

management  to  refuse  to  allow  the  workmen  to 
be  accompanied  or  to  be  represented  by  their 
own  chosen  agent  or  adviser  is  exactly  as  if  the 
workmen  were  to  insist  on  coming  face  to  face 
with  the  company's  shareholders  (for  it  is  these 
who  are  their  real  employers),  to  the  exclusion 
of  the  company's  manager,  secretary,  or  solicitor. 
The  mere  fact  that  the  management  may  find  it 
easier  to  drive  a  bargain  with  the  men  them- 
selves than  with  their  more  skilled  official 
negotiators,  is  the  very  reason  why  these  official 
negotiators  ought  not  to  be  excluded.  For  such 
a  plea  is,  in  effect,  an  avowal  that,  in  the  absence 
of  the  Trade  Union  representative,  the  workmen 
will  get  worse  terms  than  they  would  if  he  had 
been  present, — which  the  workmen  will  think  a 
remarkable  testimonial  to  the  value  of  Trade 
Unionism !  It  will  be  a  confession  that  the 
workmen  alone  would  be  at  a  disadvantage  in 
bargaining  of  which  the  management  wishes  to 
get  the  benefit.  Now,  this  is  where  the  profes- 
sional manager's  knowledge  of  human  nature 
comes  in.  From  the  standpoint  of  securing  the 
maximum  efficiency  of  production,  which  is  what 
it  is  that  the  manager  has  to  achieve,  nothing 
can  be  more  fatal  than  to  take  advantage  of  the 
workmen  in  making  a  bargain  with  them.  The 
old  Jewish  maxim  that  no  bargain  is  a  good 


38     THE  WOKKS  MANAGER  TO-DAY 

bargain  unless  it  is  one  which  genuinely  pays,  not 
one  party  only,  but  both  parties,  is  even  more 
certainly  true  of  the  wage-contract  than  of  any 
other.  If  the  workmen  feel  that  they  have  been 
in  any  way  "  done  "  in  the  deal,  good-bye  to  any 
hope  of  getting  out  of  them  the  best  that  they 
can  render.  And  for  the  management  to  refuse 
to  let  the  workmen  have  the  advantage  of  repre- 
sentation by  their  own  skilled  negotiator,  when 
this  is  asked  for,  is  inevitably — however  fair  and 
wise  and  benevolent  the  management  may  be — 
to  arouse  a  suspicion  of  having  been  "done," 
which  may  very  likely  be  as  injurious  in  its 
effect  on  output,  or  on  the  avoidance  of  waste, 
as  if  the  workmen  had  actually  been  cheated. 
The  really  able  manager  will  go  further.  He 
will  never  allow  the  workmen,  with  or  without 
the  Trade  Union  behind  them,  inadvertently  to 
make  a  bad  bargain  for  themselves.  He  knows 
that  the  concern  will  lose  more  in  efficiency  than 
it  can  possibly  gain  on  the  wage  bill,  by  any 
bargain  with  the  workpeople  which  is  not,  for 
them,  the  very  best  that  the  circumstances  will 
permit.  He  will  accordingly  be,  in  the  drafting 
of  the  terms,  as  careful  of  the  workmen's  in- 
terests as  of  those  of  the  establishment.  He 
will  see  that  the  words  used — the  workmen  are 
often  extraordinarily  incompetent  in  their  use  of 


KECOGNITION  OF  TKADE  UNIONISM   39 

words — really  express  the  substance  of  the  agree- 
ment ;  that  they  are  free  from  ambiguity,  that 
they  cover  all  the  ground,  and  that  they  provide 
for  all  alternatives  or  contingencies  that  can  be 
foreseen.  He  will  know  that  it  is  just  as  much 
to  the  real  interest  of  the  establishment  as  it  is 
to  that  of  the  workmen  that  the  latter  should 
not  discover,  when  the  new  agreement  is  put 
into  force,  that  it  does  not  secure  to  them  all 
that  they  themselves  believed  to  have  been 
conceded.1 

It  is  only  fair  to  add  that,  in  the  United 
Kingdom  even  more  than  in  the  United  States, 
the  multiplicity  of  separate  Trade  Unions  in  the 
same  industry,  and  their  disunity  and  disorganisa- 
tion, will  often  give  the  manager  some  trouble. 

1  Neglect  of  this  consideration  lay  at  the  root  of  nearly  all  the 
costly  "Labour  troubles,"  and  calamitous  suspensions  of  work,  with 
which  the  Ministry  of  Munitions  was  oppressed  during  the  years 
1915-17.  The  Ministers  and  Government  officials  concerned  were 
(not  without  reason),  time  after  time,  eager  to  get  the  Trade  Union 
representatives  to  come  to  some  agreement ;  and  it  seemed  "clever" 
to  take  advantage  of  the  workmen's  incapacity  to  express  themselves 
in  precise  terms,  of  their  failure  to  realise  what  was  the  exact  scope 
of  the  draft,  and  of  their  inability  to  remember  all  the  varieties  of 
conditions  and  all  the  contingencies  to  which  the  agreement  would 
have  to  apply.  The  Government  repeatedly  got  its  agreements  by 
resorting  to  vagueness,  ambiguity,  and  the  ignoring  of  difficult  cases, 
and  by  preventing  the  men  from  having  any  opportunity  to  think 
over  the  draft  put  before  them,  or  to  consult  their  solicitors  upon  it 
— only  to  find  that  when  the  rank  and  file  discovered  that  the  agree- 
ment did  not,  in  fact,  secure  what  they  had  believed  it  to  secure, 
they  thought  that  they  had  been  cheated  ! 


40     THE  WORKS  MANAGER  TO-DAY 

Let  him,  however,  not  make  this  an  excuse  for 
refusing  to  recognise  any  Trade  Unionism  at  all. 
The  workmen  will  recognise  his  right  to  insist 
on  having  some  responsible  party  with  whom 
to  negotiate ;  they  will  not  seriously  resent  his 
refusing  to  be  bothered,  successively,  by  one 
rival  Union  after  another ;  they  will  think  it 
quite  reasonable  for  him  to  ask  all  his  employees 
to  decide  whom  it  is  they  wish  to  represent 
them,  and  to  arrange  to  meet  all  the  representa- 
tives together.  What  they  will  not  stand  is  a 
refusal  to  deal  with  the  Trade  Unions  at  all. 


THE  STANDARD  RATE 

IN  the  imperfectly  organised  industries  (and 
this  unfortunately  means  most  of  the  industries 
of  Great  Britain  and  all  but  a  very  few  of  those 
in  the  United  States)  the  question  of  wages  will 
always  be  turning  up  in  the  sphere  of  manage- 
ment, either  with  regard  to  the  amount  of  the 
payments  to  be  made  to  particular  operatives,  or 
to  whole  grades  of  operatives,  or  else  with  regard 
to  the  method  on  which  the  workmen's  earnings 
are  to  be  computed. 

It  is  sometimes  pretended  by  optimistic 
British  employers  that  there  is  really  no  question 
at  issue  here,  as  the  Standard  Rate  is  definitely 
fixed  and  is  fully  safeguarded  by  the  agreements, 
whether  national  or  local,  concluded  between 
the  associations  of  employers  and  the  Trade 
Unions.  This  ought,  I  need  hardly  say,  to 
become  the  rule  throughout  industry,  but  it  is 

41 


42     THE  WOKKS  MANAGER  TO-DAY 

not  yet  the  case.  I  readily  admit  that,  in  the 
course  of  the  last  few  decades,  a  great  deal  has 
been  done  in  this  direction  in  the  well-organised 
industries ;  and  that  in  those  industries  the 
great  bulk  of  the  employers  have  tacitly 
abandoned  the  main  contention  for  which  practi- 
cally all  employers  used  to  fight,  namely  that  it 
was  for  each  employer  himself  to  decide  what 
wages  he  would  pay  to  his  own  workpeople. 
But  to  pretend  that  the  question  is  settled,  and 
that  no  disputes  can  reasonably  take  place  on 
this  issue,  is — as  I  need  hardly  explain  here — to 
put  our  heads  in  the  sand.1  In  the  whole  range 
of  British  business  enterprise,  so  far  as  I 
remember,  there  is  only  one  important  industry, 
that  of  cotton,  in  which  the  ground  is  at  all 
fully  covered.  In  other  industries  there  are 
practically  always  a  number  of  employers  who, 
for  good  reasons  or  bad,  are  not  parties  to  the 
Collective  Bargaining  of  the  industry's  organisa- 
tions, and  who  refuse  to  let  their  establishments 
be  governed  by  the  collective  agreements  arrived 
at.  Moreover,  even  as  regards  those  establish- 
ments which  adhere  to  the  national  agreement, 

1  "The  usual  method  of  fixing  wages  in  engineering  works  is  for 
the  foreman  to  offer  the  bare  Trade  Union  rate  in  the  case  of  workers 
where  such  a  rate  exists,  or  as  little  as  the  individual  trill  take  where 
it  does  not"  !  ("Industrial  Reconstruction:  an  Employer's  View," 
The  AthencKum,  March  1917,  p.  135). 


THE  STANDARD  RATE  43 

the  standard  wage  rates  therein  formulated  do  not 
usually  cover  with  precision  all  the  classes  of 
operatives  employed ;  they  often  omit  to  include 
some  of  the  kinds  of  work  that  has  to  be  done, 
or  some  of  the  methods  by  which  the  work  is 
performed ;  finally — and  this  is  where  the 
manager  finds  these  Collective  Agreements  most 
often  to  fail  in  practicality — they  are  usually 
confined  to  time -rates,  even  in  industries  in 
which  various  forms  of  "  Payment  by  Results  " 
are  in  vogue,  without  any  authoritative  method 
of  translating  the  Standard  Time  Rate  into  the 
piecework  prices  for  the  various  jobs.  In  fact, 
though  it  is  true  that  this  old  claim  of  the 
individual  employer  himself  to  decide  what 
wages  he  would  pay,  which  is  now  condemned 
by  the  Political  Economists,  and  formally  dis- 
credited by  Parliament,  has,  among  enlightened 
employers,  in  the  well-organised  industries  of 
Great  Britain,  been  abandoned,  can  we  really 
pretend  that  it  does  not  constantly  crop  up,  in 
this  industry  or  in  that ;  and  cause  the  manage- 
ment no  end  of  trouble  ?  It  is  an  important 
part  of  the  duty  of  a  manager  to  use  all  his 
influence  to  get  the  Collective  Agreements  cover- 
ing his  industry  made  as  complete,  as  exhaustive, 
and  as  practically  operative  as  they  are  in  the 
cotton  industry  ;  and  thus  finally  get  rid  of  the 


44    THE  WORKS  MANAGER  TO-DAY 

idea  of  the  old-fashioned  employer  that  it  is  for 
him  to  decide  what  shall  be  the  Standard  Rates 
governing  his  establishment — and,  let  me  add, 
dismissing  equally  the  idea  of  the  individual 
workmen,  or  of  groups  of  workmen,  that  they 
can  be  allowed  to  bargain  for  themselves  as  to 
these  Standard  Rates  (which,  like  the  require- 
ments of  the  Factory  Acts,  are  always  minima 
only,  and  do  not  prevent  the  employer  granting 
more,  or  the  workmen  asking  more,  when  it 
suits  either  party  to  do  so). 

For  a  long  time  to  come,  however,  the 
manager  will  find  himself,  in  most  cases,  in  the 
United  Kingdom  as  in  the  United  States,  in  an 
imperfectly  organised  industry.  He  will  there- 
fore frequently  have  to  deal  with  wages  questions  ; 
and  they  will  afford  him  great  scope  for  showing 
what  he  is  made  of.  It  was  exactly  over  these 
questions  that  the  unscrupulous  capitalist  of  the 
past  made,  from  the  standpoint  of  achieving  the 
maximum  efficiency,  his  biggest  blunder.  I  am 
afraid  that  even  professional  managers  are  still 
sometimes  failing  badly  in  this  respect,  through 
ignoring  the  psychological  reaction  on  the  opera- 
tives of  a  particular  wage-policy.  They  do  not 
prevent  the  foreman,  wherever  there  is  no  Trade 
Union  rate  plainly  applicable — and  this  is  often 
the  case  with  regard  to  half  the.  wage-earners 


THE  STANDARD  RATE  45 

employed,  notably  the  women  and  youths,  the 
semi-skilled  men  and  the  labourers — from  taking 
on  a  new  worker  (to  use  the  words  of  an  employer) 
for  "  as  little  as  the  individual  will  take."1 

I  have  known  managers  who  have  actually 
prided  themselves  on  continuously  paying  less 
than  the  local  Standard  Rate  even  to  craftsmen ; 
others  who  have  boasted  of  the  way  in  which 
they  have  evaded  wage  agreements,  and  got 
work  done  at  lower  rates  than  had  been  agreed 
upon,  by  simply  changing  the  designation  or  the 
classification  of  the  operatives  or  the  distribu- 
tion of  the  work ;  and  others  who  have,  as  they 
say  "got  their  own  back,"  when  they  were 
driven  to  concede  an  increase,  by  some  un- 
expected rearrangement  of  the  factory.  Why, 
only  the  other  day,  when  a  Lancashire  colliery 
manager  was  condemned,  in  arbitration,  to  raise 
the  wages  of  the  hewers,  he  thought  it  smart  to 
"counter"  by  immediately  advancing  the  price 
of  the  explosive  that  the  men  had  to  purchase ! 
Of  course,  the  men  retaliated,  in  all  sorts  of  ways, 
by  increasing  dilapidation  and  restricting  out- 
put; what  else  could  he  expect?  In  the  so- 
called  sweated  trades,  where  the  employer  or  the 
sub-contractor  himself  still  manages,  and  where 
there  is  seldom  anything  that  can  be  called  a 

1  Ibid. 


46     THE  WORKS  MANAGER  TO-DAY 

professional  manager,  it  is,  I  fear,  common  to  be 
perpetually  "nibbling"  at  wages  by  charges  for 
hot  water,  or  for  this  or  that  requisite  for  the 
work ;  to  make  quite  a  perceptible  sum  out  of 
the  fines,  or  out  of  the  deductions  for  bad  work ; 
and  eagerly  to  seize  every  opportunity  of  lower- 
ing the  rates.  Unfortunately,  these  practices 
of  the  discredited  "  sweated  trades  "  are  far  from 
being  unknown  in  industries  priding  themselves 
on  being  on  a  higher  plane.  The  records  of  the 
Trade  Boards  Department  of  the  Board  of  Trade 
contain  the  most  scandalous  examples  of  these 
practices ;  whilst  the  trouble  and  loss  that  they 
have  caused  to  the  Ministry  of  Munitions  is 
beyond  all  calculation. 

Now,  assuming  the  test  of  professional  manage- 
ment to  be  the  achievement  of  the  maximum  of 
productive  efficiency,  this  is  all  wrong.  It  is 
not  merely  that  the  manager  blunders  when  he 
actually  pays  less  than  the  common  Standard 
Rate,  still  more  when  he  tries  to  evade  it,  or  to 
cheat  the  operatives  in  any  way.  What  is  more, 
he  fails  in  his  business  unless  he  makes  his  work- 
people genuinely  believe  that  he  accepts  the 
principle  of  the  Standard  Rate  as  if  it  were  law. 
If  it  is  vital  for  any  genuine  success  in  manage- 
ment that  the  machines  should  be  of  first-rate 
quality,  and  running  smoothly,  it  is  at  least 


THE  STANDARD  RATE  47 

equally  vital  that  the  human  factor  should  be  of 
the  best  possible  quality,  and  that  it  should  be 
working  without  friction.  The  machine  does 
not  kick,  but  the  man  does. 

By  the  Standard  Rate,  as  you  will  all  under- 
stand, is  meant,  not  just  whatever  any  set  of 
workmen  or  any  Trade  Union  chooses  to  demand  ; 
but  the  rate  at  "  time"  or  "  piece"  which,  in  all 
decently  organised  trades,  has  been  agreed  to  as 
the  minimum  (remember,  it  is  never  anything 
but  a  minimum)  for  the  district  in  the  Collective 
Bargaining  of  the  associations  of  employers  and 
the  associations  of  wage- earners ;  or — this  is 
often  forgotten  —  in  the  absence  of  any  such 
agreement,  the  rate  which  in  practice  obtains 
for  the  wage-earners  of  like  grade  in  the  re- 
putable establishments  of  the  neighbourhood. 

I  do  not  pretend  that  this  prime  requisite  of 
successful  management  is  always  an  easy  matter. 
It  is  not  only  that,  as  I  have  already  mentioned, 
the  Standard  Rate  that  exists  is  often  very  far 
from  being  precisely  formulated  or  clearly  denned. 
There  is  often  real  difficulty  in  applying  what 
is  laid  down  as  the  Standard  Rate  to  particular 
classes  of  workers  or  particular  operatives.  Each 
establishment  is  apt  quite  honestly  to  believe 
that  it  employs  a  special  and  peculiar  kind  of 
labour,  to  which  no  existing  Standard  Rate  is 


48     THE  WORKS  MANAGER  TO-DAY 

exactly  applicable.  Bono,  fide  differences  arise 
as  to  interpretation.  All  these  are  not  reasons 
against  the  principle  of  never  derogating  from 
the  Standard  Rate  They  are  only  opportuni- 
ties for  the  manager  to  apply  his  brains  to  the 
problem.  What  is  even  more  important,  they 
avail  nothing  as  excuses  for  failure  in  this 
essential  point  of  management,  because  no 
apologies  obviate,  in  fact,  the  falling  away  from 
the  maximum  productive  efficiency  which  dero- 
gation inevitably  and  invariably  causes.  The 
problem  is  psychological,  not  legal  or  statistical. 
The  essence  of  the  matter  is  that  you  must  never 
let  any  wage-earner  in  your  establishment  have 
any  excuse  for  believing,  and  you  must  never 
allow  him  in  fact  to  believe,  that  he  or  she  is 
getting  less  than  what  is  recognised  in  the 
locality  by  the  operatives  themselves  as  the 
common  Standard  Rate.  The  enterprise  which 
does  not  understand  this  is,  from  the  standpoint 
of  maximum  efficiency,  lost.  All  the  devices 
for  nibbling  at  wages,  whether  or  not  in  the 
employer  they  amount  to  cheating,  amount  in 
the  manager  to  a  professional  blunder.  He 
cannot  secure  the  maximum  productive  efficiency 
from  a  factory  staff  which  is  subjected,  or  which 
believes  itself  to  be  subjected,  to  such  treatment. 
What  he  can  do  is  to  muddle  along,  as  too  many 


THE  STANDARD  RATE  49 

factories  in  Great  Britain  have  hitherto  muddled 
along ;  recruiting  his  staff,  in  the  main,  from 
workmen  who  are,  in  one  or  other  respect,  below 
par ;  extracting  from  them,  by  pressing  and 
driving,  an  average  output  which  is  (as  the  war 
conditions  of  1915-17  have  shown)  often  less 
than  half  of  what  they  might  produce ;  and  en- 
countering at  every  point  the  sullen  indifference 
and  rancour  which  —  imponderable  as  it  is — 
perpetually  drags  down  the  aggregate  efficiency 
of  the  undertaking.  I  am  not  now  concerned 
with  the  shortcomings  of  the  wage-earners,  which 
are  often  considerable,  nor  with  their  own  degrees 
of  guilt.  But  it  is  clear  that  the  manager  who 
finds  himself  up  against  these  subtle  drags  on 
efficiency  must  enquire  whether  he  has  not,  even 
if  only  in  small  part,  his  own  folly  or  incom- 
petence to  thank.  Depend  upon  it,  there  is  no 
factor  in  production  so  important  as  never  per- 
mitting your  operatives  to  think  it  possible  that 
you  could  ever,  under  any  temptation,  know- 
ingly derogate  from  the  common  Standard  Rate. 
I  have  sometimes  been  asked,  by  managers 
who  are  not  strong  in  economics,  whether  it  is 
not  permissible,  or  even  occasionally  necessary, 
to  reduce  the  Standard  Rate  (which,  be  it  re- 
membered, is  that  which  other  establishments 
have  to  pay — all  the  local  competitors  standing 

E 


50     THE  WOKKS  MANAGEK  TO-DAY 

on  the  same  footing)  in  order  to  permit  the 
acceptance  of  an  order,  or  the  maintenance  of 
business,  which  could  not  be  made  to  pay  at 
the  customary  wage.  My  answer,  as  it  would 
be  the  answer  of  any  instructed  economist,  is 
emphatically  no.  To  begin  with,  what  right 
has  anyone  to  assume,  as  if  it  were  obvious, 
that  the  cut  at  income  which  the  circumstances 
seem  to  require  should  be  made  off  the  wage- 
earners?  Why  should  it  be  assumed  that  the 
interest  on  the  capital  employed  must  remain 
undiminished,  that  there  must  still  be  the  same 
dividend  on  the  preference  and  ordinary  shares, 
that  the  allowances  made  to  the  working  partners 
or  the  directors'  fees  should  continue  at  the  old 
amount,  that  the  salary  of  the  manager  should 
stand  at  its  customary  figure,  that  the  salaries 
of  the  clerks  and  accountants,  the  rates  of 
commission  of  the  commercial  travellers  and 
the  agents,  the  wages  of  the  gate-keepers  and 
the  foremen  should  be  as  before,  in  doing  the 
unprofitable  business,  and  that  only  the  wages 
of  the  manual  workers  should  be  lowered  ?  All 
these  items  are  alike  shares  of  the  proceeds  of 
the  enterprise ;  and  it  is  not  surprising  that  the 
wage-earners  (who  are  now  often  becoming 
better  economists  than  their  employers  used 
to  be)  find  quite  preposterous  the  suggestion 


THE  STANDARD  RATE  51 

that  the  loss  should  fall  on  them,  whilst  the 
other  participants  in  the  proceeds  continue 
their  receipts  as  before.  As  a  matter  of  fact, 
it  is  the  very  decisive  judgment  of  Political 
Economy  that,  far  from  being  the  class  that 
should  alone  bear  the  loss,  the  manual  working 
wage-earners,  along  with  the  salaried  staff, 
ought  to  be  the  last  even  to  be  asked  to  par- 
ticipate in  a  loss.  They  are  not  invited  to  share 
the  exceptional  gains  of  profitable  contracts. 
In  all  businesses  there  are  ups  and  downs,  lean 
transactions  and  fat,  good  years  and  bad.  The 
wage-earners,  like  the  salaried  staff,  are  paid 
at  commuted  rates,  ignoring  these  variations 
in  profit ;  and  the  ordinary  shareholders  or  other 
capitalist  proprietors  who  have  engaged  in  the 
business  have  done  so  on  this  basis.  It  is  just 
for  "standing  the  racket"  of  such  fluctuations 
that  they  receive  their  profit.  For  them  to  seek 
to  make  the  wage-earners  (or  the  salaried  staff) 
bear  the  burden  of  a  specially  lean  transaction, 
or  an  unprofitable  branch  of  trade,  or  an  ex- 
ceptionally bad  year,  is  a  breach  of  the  funda- 
mental understanding  on  which  the  industry 
is  carried  on. 

It  may,  however,  be  said  that  these  considera- 
tions of  economics — or,  it  may  be,  of  justice — 
are  all  very  well ;  but  that,  so  long  as  we  allow 


52     THE  WORKS  MANAGER  TO-DAY 

the  nation's  industry  to  remain  under  private 
control,  the  owners  of  the  business  simply  will 
not  undertake  transactions  by  which  they  expect 
to  make  no  profit,  or  may  even  foresee  a  loss ; 
that  any  reduction  of  expenses  to  be  effected 
by  cutting  down  the  directors'  fees  and  the 
salaries  of  the  staff  would  be  insufficient ;  and 
that  the  practical  alternative  to  a  lowering  of 
wages — which,  it  is  always  hoped,  need  only 
be  temporary — will  be  to  forego  the  order  that 
would  ensure  continuity  of  employment,  or  even 
to  shut  down  the  works.  Even  then  the  wage- 
earners  would  be  advised  by  the  economists  not 
to  yield  to  the  pressure.  It  will  pay  them 
better  in  the  long  run  to  refuse  to  lower  their 
rates  of  wages — this  policy  has  well  paid  the 
hand  -  papermakers  and  the  hand  -  bootmakers 
in  Great  Britain  even  when  threatened  with 
the  total  extinction  of  their  industries1 — and  the 
answer  that  the  management  ought  to  receive 
to  any  such  proposition  is  that,  to  the  wage- 
earners  as  to  the  community,  the  continuance  of 
no  one  establishment  is  essential ;  and  that  it 

1  See,  for  complete  elucidation  of  this  problem,  Industrial  Demo- 
cracy, by  S.  and  B.  Webb,  pp.  418-20. 

It  is  worth  no  ting  that  the  economists  are  emphatic  on  the  foreign 
trade  question.  "General  low  wages,"  wrote  John  Stuart  Mill, 
"  never  caused  any  country  to  undersell  its  rivals,  nor  did  general 
high  wages  ever  hinder  it  from  doing  so  "  (Principles  of  Political 
Economy,  book  iii.  ch.  xxv.  p.  414  cf  1865  edition). 


THE  STANDARD  RATE  53 

is  "up  to "  those  who  are  directing  the  industry 
to  find  a  way  of  carrying  it  on,  if  not  in  this 
establishment,  then  in  others  more  skilfully 
administered,  without  encroaching  on  the  workers' 
Standard  of  Life. 

But  the  experienced  manager  will  not  raise 
such  a  question.  He  will  know  that  it  is  not 
the  rate  of  wages  that  makes  a  difference  to  the 
profit  and  loss  account,  but — what  is  a  very 
different  thing — the  cost  of  labour.  He  will 
not  be  tempted  to  seek  a  reduction  in  the  cost 
of  labour  by  such  an  expedient  as  a  reduction 
in  the  rate  of  wages,  because  his  professional 
training  will  have  taught  him  that  this  expedient 
(which  may  probably  be  urged  on  him  by  the 
less  experienced  proprietors)  seldom  achieves 
its  end.  If  wages  are  cut  by  ten  per  cent,  can 
he  have  any  assurance  that  the  workmen  will 
not  be  so  discouraged  and  annoyed — not  to  say 
deteriorated  in  strength  and  endurance — so  to 
fall  away  ten  per  cent  in  aggregate  output? 
Will  they  be  so  enthusiastic  as  before  in  doing 
their  best  ?  Will  they  be  equally  careful  to 
prevent  waste  or  dilapidation  ?  The  more  ex- 
perienced and  more  instructed  the  manager,  the 
stronger  will  be  his  feeling  that  a  reduction  in 
the  rate  of  wages,  though  it  seems  such  an 
obvious  way  out  of  a  difficulty,  is  hardly  ever 


54    THE  WORKS  MANAGER  TO-DAY 

the  way  in  which  the  necessary  reduction  in 
labour  cost  can  be  achieved.  And  he  will 
equally  know  that  not  by  any  lengthening  of 
the  factory  hours,  or  by  any  increase  of  over- 
time or  Sunday  work  can  labour  cost  be  lowered  ; 
or,  except  for  a  brief  and  costly  spurt,  even 
the  aggregate  output  increased.  The  evidence 
all  points  in  the  other  direction.  Every  re- 
duction in  the  normal  working  week  (which 
used  to  be,  150  years  ago,  as  much  as  90  or 
even  100  hours)  down  to  the  present  half  of 
that  number  of  hours,  has  been  accompanied 
by  an  almost  contemporaneous  increase  in  out- 
put per  man.  It  is  difficult  to  believe  that 
"  scientific  management "  has,  in  this  particular 
year  in  any  particular  part  of  the  world's  surface, 
reached  finality  in  this  respect.  The  process 
of  reducing  the  hours  of  labour  and,  by  their 
more  intelligent  rearrangement,  at  the  same 
time  increasing  the  average  output — incredible 
as  this  may  seem  to  some — is  obviously  still 
going  on. 


VI 
PAYMENT  BY  RESULTS 

AT  the  present  moment  (1917)  it  is  not  too 
much  to  say  that  British  workmen  have  a  feel- 
ing of  grave  apprehension  as  to  their  position 
after  the  war.  It  was  not  merely  that  the 
workmen  have,  unfortunately,  lost  all  confidence 
in  Government  promises  as  regards  the  treat- 
ment of  Labour.  The  employers,  it  is  believed, 
simply  will  not  consent  to  restore,  in  any 
genuine  way,  the  status  quo  ante  helium  as 
regards  the  conditions  under  which  their  fac- 
tories are  run ;  and  what  is  doubted  is  the 
capacity,  as  well  as  the  willingness,  of  the 
Government  to  enforce  the  restoration  other- 
wise than  nominally  and  perfunctorily.  It  is 
around  the  introduction  or  the  retention  of  this 
or  that  system  of  Payment  by  Results  that  the 
storm  will  burst.  Other  dangerous  topics,  like 
the  entrance  of  women  or  of  unskilled  men  upon 

65 


56    THE  WORKS  MANAGER  TO-DAY 

the  tasks  formerly  monopolised  by  skilled  crafts- 
men, or  the  changing  lines  of  demarcation 
between  different  trades,  are  themselves  aggra- 
vated by  the  quarrels  over  piecework.  It  is 
very  largely  by  its  insistence  on  new  kinds  of 
piecework  payment  that  the  American  campaign 
of  "Scientific  Management" — to  which  I  shall 
allude  later  —  arouses  such  bitter  resentment. 
And  it  is  the  widespread  enforcement,  since  the 
beginning  of  the  war,  of  piecework  systems  of 
remuneration  in  different  branches  of  the  British 
engineering  industry  that  will  present  the 
greatest  difficulty  to  the  Government  in  ful- 
filling its  pledge  that  all  the  departures  from 
the  former  practice  and  customs  of  the  workshop 
shall  be,  without  qualification,  undone  and  re- 
versed.1 

The  quarrel  about  payment  by  the  piece  as 
against  payment  by  the  hour  is  almost  invariably 
misunderstood.  It  is  often  assumed  that  work- 
men, and  especially  Trade  Unionists,  object  to 
piecework.  So  far  is  this  from  being  the  case, 
that  the  average  workman  usually  prefers  to 
get  the  chance  of  working  by  the  piece,  and, 
apart  from  the  transport  services,  and  the  general 
labourers,  a  majority  of  the  Trade  Unions  in 

1  See  The  Restoration  of  Trade  Union  Conditions,  by  Sidney  Webb, 
109  pp.,  1917,  la. 


PAYMENT  BY  RESULTS  57 

Great  Britain  absolutely  insist  on  this  system 
of  remuneration.  Nor  is  it  true  that  employers 
invariably  desire  to  pay  by  the  piece.  The 
London  printing  firms  introduced  over  a  hundred 
years  ago,  into  what  was  then  a  piecework  trade, 
payment  by  time  as  an  employers'  device ;  and 
the  greatest  strike  in  the  boot  and  shoe  industry 
was  caused  by  the  employers'  attempt  to  abandon 
piecework  for  timework.  Everywhere  the  par- 
ticular class  of  employers  known  as  sub-con- 
tractors seek  to  get  the  profit  of  their  own 
capacity  for  "driving"  by  keeping  all  their 
workmen  on  time  wages.  On  the  other  hand, 
in  Great  Britain,  the  cotton  operatives  and  coal- 
miners,  the  tailors  and  boot  and  shoe  operatives, 
the  glass-workers  and  the  steel  smelters,  the 
lacemakers  and  the  cigar  -.vorkers  are  instances 
of  strongly  organised  industries,  some  machine 
workers,  others  handicraftsmen,  in  which  pay- 
ment by  the  piece  is  enforced  by  strong  Trade 
Unions  and  accepted  by  the  employers.  This 
fact  of  itself  negatives  the  curious  delusion, 
still  frequently  entertained  by  employers  and 
managers,  that  the  workmen's  objection  to 
systems  of  Payment  by  Results — in  the  minority 
of  cases  in  which  they  do  so  object — is  wholly 
or  mainly  based  on  their  dislike  to  the  job  being 
too  rapidly  completed,  and  to  a  fear  that  there 


58     THE  WORKS  MANAGER  TO-DAY 

would  presently  not  be  enough  jobs  to  go  round. 
This  fallacy  —  known  to  economists  as  the 
"  Lump  of  Labour  Fallacy " — founded  on  the 
belief  that  there  is  only  a  given  quantity  of 
business  to  be  done,  used  to  be  commonly 
prevalent  among  all  classes,  the  workmen  not 
excluded.  But  if  I  judge  correctly,  it  is  now 
much  more  commonly  to  be  found  among  em- 
ployers and  managers,  when  they  are  discussing 
international  competition,  or  arranging  for  a 
concerted  spell  of  "short  time"  or  other  limita- 
tion of  production,  than  it  is  among  the  edu- 
cated British  Trade  Unionists  of  to-day.  How- 
ever, it  is  quite  true  that,  in  the  engineering, 
building,  and  woodworking  trades,  or  at  least 
in  most  of  their  branches,  the  employers  and 
managers  have  not  yet  invented  any  system 
of  Payment  by  Results  which  the  great 
majority  of  the  British  workmen  will  agree  to 
accept. 

This  has  not  been  for  want  of  trying.  During 
the  last  three  decades,  engineering  employers 
have  devised  lots  of  systems  of  premiums  and 
bonuses  for  increased  output,  from  Mr.  Halsey's 
Canadian  plan  in  1890,  through  the  various 
modifications  of  Messrs.  David  Rowan  &  Co. 
of  Glasgow,  and  those  of  J.  &  G.  Weir  of 
Cathcart,  down  to  those  of  Messrs.  Barr  &  Stroud 


PAYMENT  BY  RESULTS  59 

and  others  in  Great  Britain,1  and  the  bewildering 
variety  of  "  reward  "  systems — such  as  those  of 
Gantt  and  Harrington  Emerson  —  in  which, 
since  the  days  of  F.  W.  Taylor,  the  American 
"Efficiency  Engineers"  have  delighted.  All  these 
systems,  whatever  their  complications,  amount, 
as  it  seems  to  the  workman,  in  comparison  with 
simple  piecework,  to  nothing  more  than  ingenious 
arithmetical  scales  for  depriving  the  operative  of 
part  of  the  increased  earnings  that  would  be 
equivalent  to  the  increase  in  his  output.2  For 
instance,  when  the  workman  produces  twice  as 
much  as  the  basic  output,  the  object  of  the 
Halsey,  the  Rowan,  the  Weir,  and  all  the  other 
scales  appears  to  be  to  take  care  that  he  shall 
get  less  than  twice  the  basic  earnings,  irrespective 
of  any  improvement  introduced  by  the  employer. 
The  Weir  scheme  will  give  the  workman  one- 
half  of  the  time  saved,  the  Halsey  scheme  one- 
third  of  the  time  saved,  the  Rowan  scheme  a 
constantly  diminishing  fraction,  so  that  even  if 
the  workman  saves  nine-tenths  of  the  time,  he 
can  never  do  more  than  double  his  earnings. 

1  The  Premium  System  of  Paying  Wages  (Office  of  The  Engineer, 
33  Norfolk   Street,    London,   W.C.2),    66   pp.,    1917;    A  Rational 
Wages  System,  by  Henry  Atkinson  (112  pp.,  1917,  Is.). 

2  ' '  There  is,  however,  another  plan,  and  that  is  so  to  arrange  the 
premium  that  under  no  conditions  can  the  workman  so  far  reduce  his 
time  as  to  tempt  the  employer  to  cut  the  rates  "  ( The  Premium  System 
of  Paying  Wages,  published  by  The  Engineer,  1917,  p.  10). 


60    THE  WORKS  MANAGER  TO-DAY 

This  is  put  quite  naively  and  candidly  by  the 
American  "  Efficiency  Engineers."  They  have  no 
intention  of  letting  the  workman  have  the  pro- 
ceeds of  his  extra  diligence,  speed,  and  intensity. 
"We  find,"  says  Mr.  Harrington  Emerson, 
"we  can  double  a  40  per  cent  efficiency  by 
paying  a  bonus  of  3 '25  per  cent;  that  we  can 
double  a  45  per  cent  efficiency  by  paying  a  bonus 
of  10  per  cent ;  that  we  can  double  a  50  per  cent 
efficiency  by  paying  a  bonus  of  20  per  cent ;  and 
that  we  can  double  a  60  per  cent  efficiency  by 
paying  a  bonus  of  40  per  cent."1  Now,  the 
workman's  increase  of  output  under  a  system 
of  "  Payment  by  Results  "  is  often  partly  due  to 
some  improvement  effected  at  the  employer's 
expense,  such  as  the  substitution  of  a  more 
efficient  machine,  the  use  of  high-speed  steel,  an 
improvement  in  the  process,  keeping  the  tools 
up  to  a  higher  degree  of  accuracy,  supplying 
every  requirement  with  the  least  possible  wait- 
ing, and  so  on.  In  such  a  case  there  is  a  good 
reason  for  the  employer  sharing  in  the  increased 
proceeds.  But  when  no  such  improvement  has 
taken  place,  there  seems  no  ground  in  equity 
why  an  increase  in  output,  which  is  then  due, 
ex  hypothesit  exclusively  to  the  increased  speed, 

1  A  Comparative  Study  of  Wage  and  Bonus  Systems,  by  Harrington 
Emerson,  1912,  p.  36. 


PAYMENT  BY  RESULTS  61 

intensity,  and  assiduity  that  the  operative  has 
put  into  the  work,  should  not  bring  to  him,  as 
it  does  on  simple  payment  by  the  piece,  an 
exactly  corresponding  increase  in  earnings.  The 
justice  of  this  is  admitted  even  by  the  advocates 
of  premium  systems  which  infringe  it.  "  If  there 
are  no  improvements  by  the  employer,  there  is 
no  reason  why  the  employee  should  not  get  in 
full  the  increased  result  due  to  his  greater 
diligence  and  skill." 1  The  employer's  gain  from 
the  increased  output  lies  in  the  reduced  cost  of 
production,  in  that  all  the  standing  charges 
(rent,  interest,  depreciation,  management,  etc.) 
are  spread  over  a  larger  output.  Thus,  these 
complicated  "premium  bonus  "  scales  or  "  reward" 
systems  are  handicapped,  from  the  start,  so  far 
as  the  workmen  are  concerned,  by  their  apparent 
unfairness  in  this  respect.  This  has  been  made 
one  of  the  leading  complaints  against  them. 

They  excite  resentment,  too,  because  they 
exhibit  no  comprehension  of  the  workmen's 
fundamental  objection  to  all  the  schemes  of 
"Payment  by  Results"  that  have  yet  been 
proposed  in  the  engineering,  building,  or  wood- 
working industries.  As  is  proved  by  actual 
experience  in  many  other  British  industries, 

1  Harrington  Emerson,   in   Transactions  of  American  Society  of 
Mechanical  Engineers,  1903,  vol.  xxr.  p.  78. 


62    THE  WORKS  MANAGER  TO-DAY 

what  the  instructed  workman  and  the  properly 
led  Trade  Union  object  to  is  not  piecework  as 
such,  or  any  other  form  of  Payment  by  Results, 
but  every  such  system  that  is  unaccompanied, 
not  only  by  an  accurate  equivalence  of  the 
basic  "  Standard  Time "  with  the  Standard 
Time  Rate,  but  also  by  quite  definite  security 
for  the  future  maintenance  of  the  standard  rate 
of  remuneration  for  effort.  And  here,  in  the 
practically  unanimous  judgment  of  the  econo- 
mists, the  workman  is  right.  What  is  usually 
meant  by  the  introduction  of  payment  by  results 
— as,  for  instance,  in  the  engineering  trade — is 
that,  instead  of  paying  wages  per  hour  or  per 
week  at  a  rate  settled  by  Collective  Bargaining, 
the  men  are  put  to  work  on  a  succession  of  jobs 
the  rates  for  which  (or  in  the  case  of  the 
"premium  bonus"  system,  the  times  allowed 
for  which)  are,  without  concert  with  the 
operative,  fixed  by  the  foreman,  or  by  the 
employer's  rate-fixer  in  the  office,  separately  for 
each  job  and  for  each  workman.1  There  is,  in 

1  This  autocracy  is  frankly  avowed.  "The  time  allowed  for  any 
job  will  be  fixed  by  the  manager  and  heads  of  departments  "  (Notes 
on  the  Premium  System  of  Wage-Earning,  by  Barr  and  Stroud,  1902). 
"Our  friend  has  never  thought  for  a  moment  that  the  man  should 
have  a  say  in  fixing  time  for  a  job,  which,  under  the  premium  plan, 
is  only  another  way  of  fixing  a  price"  (Letter  from  Mr.  G.  N. 
Barnes,  M.P.,  in  1902,  on  another  Premium  Bonus  System  ;  in  The 
Premium  System  of  Paying  Wages,  p.  42). 


PAYMENT  BY  RESULTS  63 

practice,  usually  not  even  any  pretence  at 
bargaining ;  the  rates  are  handed  out,  and  it  is 
a  case  of  "  take  it  or  leave  it."  But  even  if  the 
foreman  or  rate-fixer  deigns  to  discuss  the  details 
of  the  rate  with  the  workman,  or  with  the  Shop 
Steward,  and  to  listen  to  his  objections  —  the 
form  of  Individual  Bargaining  which  has  been 
called,  in  the  engineering  trade,  "Mutuality" — 
the  employer  refuses  altogether  to  submit  the 
piecework  rates,  or  the  premium  bonus  times,  to 
verification  by  the  official  of  the  Trade  Union, 
or  to  enter  into  negotiations  with  the  Trade 
Union  about  them,  still  more,  to  stereotype 
them  in  an  inflexible  printed  list,  or  to  let  the 
Trade  Union  official  himself  fix  them.  The 
employer  introducing  such  a  method  probably 
does  not  realise  that,  in  effect,  he  is  claiming  to 
throw  over  the  principle  of  Collective  Bargaining, 
which  the  Trade  Unions  thought  that  they  had 
got  accepted  with  regard  to  wages;  and  to 
revert,  in  the  vital  matter  of  fixing  each  man's 
pay,  to  Individual  Bargaining ;  or,  more  generally, 
to  no  bargaining  at  all.  It  will  be  at  once 
realised  that  to  raise  this  fundamental  issue  of 
Trade  Unionism  is  to  invite  a  serious  conflict. 

There  is  a  further  grievance.  In  some 
engineering  works,  and  over  certain  jobs,  with 
these  complicated  premium  systems,  the  work- 


64    THE  WOEKS  MANAGER  TO-DAY 

men  are  not  even  permitted  to  understand  how 
the  amount  of  their  earnings  is  computed. 
"  On  pay  day  the  workman  finds  a  few  shillings 
extra  waiting  for  him.  He  is  not  given  the 
means  of  calculating  how  much  premium  he  has 
a  right  to  expect,  nor  of  checking  the  amount 
received.  If  he  is  not  satisfied  with  the  premium 
he  need  not  take  it ;  there  is  no  compulsion.  He 
has  his  ordinary  hourly  wage  without  it.  This 
is  the  position  taken  up  by  some  employers." l 
The  employer,  in  such  cases,  cannot  get  out  of 
his  head  that  it  is  a  gratuity  that  he  is  offering 
the  workmen — as  if  the  firm  were  not  obtaining 
in  exchange  actually  more  than  the  equivalent 
of  the  premium  in  effort  and  product !  The 
workman,  on  the  other  hand,  regards  the 
premium  strictly  as  part  of  the  wages  that  he 
has  earned  by  the  sweat  of  his  brow — and  even 
the  part  that  he  has  earned  under  the  greatest 
strain — which  it  is  vital  to  his  interests  that 
he  should  have  precisely  fixed  by  Collective 
Bargaining,  and  accurately  calculated.  Here 
the  workman  is  so  plainly  right  that  the  matter 
is  not  worth  argument. 

Usually,  however,  the  general  basis  of  the 
premium  system  has  been  more  or  less  explained 
to  the  workmen.  What  is  not  explained  to 

1  TJu  Premium  System  of  Paying  Wages,  p.  27. 


PAYMENT  BY  EESULTS  65 

them  is  how  each  of  the  particular  "  times " 
allowed  for  successive  jobs  —  on  which  their 
earnings  absolutely  depend — is  arrived  at  by  the 
employer's  rate-fixer.  This  is  not  due  wholly  to 
the  refusal  of  the  rate-fixer  to  explain.  The  veri- 
fication of  the  basis  and  of  the  calculation  of 
this  "time"  is  anyhow  practically  out  of  the 
reach  of  the  ordinary  mechanic  (as  is  equally 
the  case  with  the  earnings  of  the  cotton  opera- 
tive under  his  complicated  Piecework  Lists) ; 
and  he  could  obtain  a  satisfactory  assurance 
that  his  interests  were  not  being  prejudiced 
only  by  having,  like  the  cotton  operative,  his 
own  expert  representative  (whether  appointed 
for  one  factory,  or  for  all  the  factories  of  each 
district),  to  check  the  figures  of  the  employers' 
rate-fixers.  This,  I  believe,  has  nowhere  yet 
been  conceded  by  any  engineering  employer. 
In  principle,  it  seems  to  me  only  fair,  if  these 
things  are  made  matters  of  bargain,  that  the 
workmen  should  have  their  own  rate-fixer,  to 
agree  with  the  employer's  rate-fixer,  on  this 
all  -  important  element  of  the  wage  -  contract. 
The  principle  of  allowing  the  workmen's  paid 
expert  to  examine  and  check  the  calculations 
made  on  behalf  of  the  employers  has  long  been 
admitted  in  Great  Britain  in  wage-arbitrations 
and  sliding  scales,  where  the  selling  prices 


66     THE  WORKS  MANAGER  TO-DAY 

actually  obtained  by  the  employers,  and  some- 
times other  details,  are  not  accepted  from  the 
employers  themselves  but  are  habitually  ascer- 
tained independently,  from  their  books,  either 
by  an  agreed  firm  of  public  accountants,  or  by 
two  public  accountants,  one  representing  the 
Trade  Union  and  the  other  the  Employers' 
Association.  An  even  closer  analogy  is  afforded 
by  the  statutory  "  check-weigher  "  in  a  colliery, 
whom  the  coal-hewers  may,  under  the  Mines 
Regulation  Acts,  resolve  by  ballot  to  appoint, 
at  the  expense  of  all  the  men  in  the  pit ;  and 
who  is  statutorily  authorised  to  claim  access  to 
the  records  of  each  man's  weight  of  coal  sent  up 
to  the  surface,  so  that  he  may  be  able  to  verify 
the  accuracy  of  the  sum  eventually  tendered  to 
each  man  as  his  fortnightly  wages. 

I  have  heard  some  employers — some  pro- 
fessional managers  even  —  express  surprise  at 
the  obstinate  resistance  shown  by  the  Trade 
Union,  or  their  own  workmen,  to  the  introduc- 
tion of  piecework  or  other  systems  of  Payment 
by  Results,  after  the  utmost  care  had  been 
taken  by  the  management  to  ensure  that  the 
piecework  rates,  or  the  premium  bonus  times, 
should  be  fixed,  at  the  outset,  in  an  exceedingly 
liberal  way,  so  as  to  enable  every  man  to  earn 
at  least  the  old  customary  Standard  Rate,  This 


PAYMENT  BY  RESULTS  67 

surprise  or  wonder  at  the  "unreasonableness" 
of  the  workmen  reveals  that  such  employers  or 
managers  still  do  not  understand  the  workmen's 
objection ;  nor  why  it  is  that  Political  Economy 
is  now  in  this  matter  so  emphatically  on  the 
workmen's  side.  What  the  workmen  are  think- 
ing of  is  not  their  own  wages,  but  wages  in  the 
future.  The  workmen  feel  that  when  the  fixing 
of  the  piecework  rate  or  the  premium  bonus  time 
for  each  successive  job  remains  in  the  hands  of 
the  employer,  or  of  his  paid  agent,  the  men  have 
no  assurance  that  if  they  put  the  utmost  possible 
energy  into  their  work,  and  increase  their  speed 
and,  consequently,  their  output — at  greatly  in- 
creased strain  to  themselves,  and  waste  of  tissue 
which  has  to  be  made  good  by  increased  food — 
the  foreman  or  rate-fixer  will  not  reduce  the 
piecework  rate  allowed  for  the  next  job.  In 
fact,  it  has  been  the  habitual  practice  in  the 
past,  as  has  frequently  been  admitted,  in  all 
sorts  of  trades,  all  over  the  world,  to  "cut" 
piecework  rates,  whenever  the  workers  were 
found  to  be  habitually  making  more  than  the 
employer  thought  to  be  a  reasonable  wage.1 

1  One  employer  told  me  that  he  had  been  "  compelled  "  to  cut  the 
rates  (though  he  was  thereby  committing  an  offence  against  the  law, 
and  nominally  risking  prosecution  in  the  Munitions  Tribunal), 
because  his  workers  increased  their  output,  and  therefore  their 
earnings,  to  such  a  degree  that  they  became  so  prosperous  that  they 


68    THE  WOKKS  MANAGER  TO-DAY 

Sometimes  this  has  been  done  peremptorily  and 
brutally  ;  often  by  an  ignorant  foreman  or  office- 
clerk.  Sometimes,  I  am  ashamed  to  say,  it  has 
been  done  secretly,  without  letting  the  workman 
know  of  the  reduction — an  act  of  robbery.  Some- 
times it  has  been  subtly  concealed  by  being  done 
on  the  substitution  of  one  man  for  another ;  some- 
times it  has  been  done  even  more  insidiously — this 
is  often  not  recognised  by  the  employer  as  being 
a  cut  at  all — when  a  new  rate  has  necessarily 
to  be  fixed  for  a  new  job,  and  the  change  is  made, 
not  in  correspondence  with  the  amount  of  devia- 
tion from  the  old  job,  but  with  a  complete  revision 
of  the  original  basis,  taking  advantage  of  the 
new  standard  of  output  that  has  been  set  up. 

kept  bad  time.  He  cut  the  rates  drastically  and  "bluffed"  the 
workers  into  accepting  his  cut,  so  as  simultaneously  to  increase  his 
own  profit  and  to  impoverish  the  workers  to  the  extent  necessary  to 
drive  them  to  work  full  time.  He  saw  no  immorality  in  such  be- 
haviour, and  continued  to  be  quite  unable  to  understand  why 
systems  of  Payment  by  Results  are  resented. 

It  is  sometimes  asserted  that,  whatever  may  have  been  the  case  in 
simple  piecework,  rate-cutting  does  not — it  is  sometimes  naively  said 
cannot — take  place  under  a  "scientific"  premium  bonus  system. 
But  neither  the  men's  experience  nor  the  employers'  statements  bear 
this  out.  We  read  that  the  miscalculations  in  fixing  times  under 
the  Halsey  system  have  "led  in  more  than  one  case  to  cutting" 
(The  Premium  System  of  Paying  Wages,  1917,  p.  47).  "The 
dangerously  rapid  rise  of  rate  by  Weir's  plan  .  .  .  has  resulted  in 
cutting  in  more  than  one  works "  (ibid.  p.  57).  "  Cutting  in  a 
lesser  degree  is,  however,  exceedingly  probable  when  the  ordinary 
Halsey  system,  either  at  30  per  cent  or  50  per  cent  division,  is 
employed.  The  two  largest  users  of  this  method  in  this  country 
have  both  cut  at  various  times  "  (ibid,  p.  58). 


PAYMENT  BY  KESULTS  69 

The  quarrel  is,  of  course,  not  a  new  one.  A 
very  instructive  instance  will  be  found  in  the 
Life  of  William  Denny,  in  the  experience  of 
that  distinguished  shipbuilder  of  Dumbarton. 
He  himself  relates  how  he  used  to  denounce  the 
folly  of  workmen  in  resenting  systems  of  Pay- 
ment by  Results.  After  many  years,  however, 
he  realised  that — whatever  might  be  the  virtuous 
intentions  of  himself  and  his  partners — the  fore- 
man, and  even  the  heads  of  the  several  branches 
of  the  establishment,  simply  could  not  refrain,  in 
their  zeal,  from  regularly  cutting  rates  whenever 
they  thought  the  workmen  were  "getting  too 
much."  His  remedy  was  the  not  very  satisfactory 
one  of  setting  aside  one  of  the  partners  of  the 
firm  to  go  regularly  through  all  the  pay-sheets, 
and  insist  on  seeing  that  in  no  case  was  the  rate 
cut  beyond  what  he  thought  necessary ;  and  on 
every  workman  being  paid  what  he  (the  partner) 
thought  enough.1 

We  may  recognise  a  marked  change  of  opinion 
among  employers  and  managers  on  this  subject 
of  rate-cutting ;  and  this  change,  though  it  is  to 
be  hailed  as  an  advance  in  morality,  makes  it 
difficult  to  discuss  the  subject  with  particular 
firms.  A  generation  ago  hardly  any  employer 

1  Life  of   William  Denny,  by   A.   B.    Bruce,   1889;    Industrial 
Democracy,  by  S.  and  B.  Webb,  pp.  293-7. 


70    THE  WORKS  MANAGER  TO-DAY 

was  ashamed  of  rate-cutting.  Nowadays,  most 
reputable  firms  disclaim  it;  and  proclaim  that 
in  their  own  practice  it  only  occurs  in  quite 
exceptional  circumstances,  when,  like  William 
Denny,  they  assume  it  to  be  justified.  We  may 
wholly  accept  these  assurances ;  but  the  records 
of  arbitration  and  other  proceedings  prove  that, 
in  other  establishments  in  the  same  industry, 
rate-cutting  still  prevails  ;  sometimes  systematic- 
ally— we  can  hardly  say  unblushingly,  because 
the  principals  usually  disavow  any  knowledge 
or  sanction  of  it — but  the  rate-fixer  or  foreman 
cannot  apparently  get  it  out  of  his  head  that  it  is 
his  bounden  duty  to  adopt  the  practice.  "  What 
can  one  do,"  remarked  one  naive  foreman  in 
191 5,  "when  a  girl  is  earning  as  much  as  fifteen 
shillings  a  week,  but  lower  the  piece-rate."  * 

1  Report  of  the  Chief  Inspector  of  Factories,  1915,  p.  49.  Among 
the  employers  themselves  the  change  in  opinion,  and  the  develop- 
ment of  compunction  about  rate-cutting,  has  taken  place  at  different 
rates,  and  to  different  degrees,  in  different  parts  of  Great  Britain. 
Thus,  I  have  been  informed  by  (perhaps  optimistic)  engineering 
employers  that  there  is  now  (1917)  next  to  no  cutting  of  rates 
among  the  Clyde  firms.  On  the  other  hand,  it  is  admitted  still  to 
take  place  among  engineering  firms  in  the  Midlands,  Lancashire,  and 
Yorkshire.  Abundant  evidence  has  been  found  by  the  Ministry  of 
Munitions  and  by  the  Trade  Board  Department  of  the  Board  of 
Trade — not  to  say  also  the  Factory  Department  of  the  Home  Office — 
that  it  is  more  widely  prevalent  in  Great  Britain  than  the  best 
employers  are  aware,  or  can  easily  believe.  "  It  is  not  the  practice 
of  the  best  employers,"  said  the  Minister  of  Munitions  in  1917, 
"but  it  is  adopted  by  many"  (Hansard,  June  28,  1917,  p.  586).  In 
the  United  States  it  seems  to  be  still  almost  universal. 


PAYMENT  BY  RESULTS  71 

It  must  be  remembered  that,  even  where 
the  workmen  have  learnt  to  trust  the  present 
principals  in  an  establishment,  who  promise 
and  assure  them  that  rates  shall  never,  under 
any  circumstances,  be  cut,  the  workmen  (a)  are 
never  offered  any  legally  binding  guarantee  to 
that  effect  (which  would,  indeed,  be  almost  im- 
possible to  contrive),  so  that  there  is  no  assurance 
that  the  employer  may  not  (like  William  Denny) 
subsequently  change  his  mind ;  (6)  are  not 
afforded  any  opportunity  of  controlling,  or  even 
of  verifying,  the  basis  on  which  the  changing 
rates  are  from  time  to  time  actually  computed — 
a  position  of  helplessness  in  which  the  employer 
would  never  dream  of  placing  himself  with 
regard  to  the  most  reputable  and  trustworthy 
contractor  for  materials ;  and  (c)  are  offered  no 
protection  for  the  future  maintenance  of  the 
rates  in  the  event  of  a  change  of  management  or 
of  proprietorship ;  perhaps  the  merger  of  the 
firm  in  a  giant  concern  which  is  known  to  make 
a  practice  of  rate-cutting  !  In  fact,  the  bargain 
offered  by  the  most  honourable  and  humane  firm 
is,  from  the  point  of  view  of  a  legal  safeguarding 
of  the  men's  future  interests,  plainly  not  one 
which  any  solicitor  could  advise  the  workmen  to 
accept  as  a  matter  of  business. 

Now,  I  do  not  want  here  to  go  into  the  question 


72    THE  WORKS  MANAGER  TO-DAY 

of  the  morality  of  "  cutting  rates."  I  prefer  to 
deal  with  it  in  this  connection  solely  with  regard  to 
its  effect  on  industrial  efficiency.  If  a  workman 
who  has  been  receiving  forty  shillings  a  week  as 
a  time  wage  (assuming  this  to  be  the  Standard 
Rate)  is  put  upon  piecework,  or  is  persuaded  to 
accept  a  "  premium  bonus,"  or  some  other  system 
of  "  reward"  dependent  on  his  output,  the  object 
of  the  employer  is  to  induce  him  to  labour  more 
diligently,  to  put  more  intensity  into  his  work, 
to  avoid  every  possible  waste  of  time  or  material 
— in  short,  to  "speed  up"  his  production,  and, 
with  it,  his  expenditure  of  energy,  physical  or 
mental,  as  compared  with  work  at  the  hitherto 
customary  speed.  Assuming,  as  we  may,  that 
the  piecework  rate  or  bonus  time  is  calculated,  at 
the  outset,  on  the  basis  of  the  timework  wage — 
say  at  "time  and  a  quarter"  or  "time  and  a 
third  " — any  increase  of  output  or  of  industrial 
efficiency  (above  the  fraction  allowed  over 
"time")  is  wholly  profitable  to  the  employer. 
If  the  workman,  stimulated  by  the  prospect  of 
increased  earnings,  manages  to  turn  out  half  as 
much  again,  or  (as  occasionally  happens)  twice  or 
three  times  as  much,  and  (on  a  simple  piecework 
system)  draws,  at  the  end  of  the  week,  a  corre- 
spondingly increased  amount  of  money,  this  is 
no  loss  to  the  employer.  The  labour  cost  of 


PAYMENT  BY  RESULTS  73 

each  article  has  not  been  raised  in  the  very 
least.1  It  is,  on  the  contrary,  a  net  gain  to  the 
employer,  notwithstanding  the  great  increase 
in  the  man's  earnings,  because  the  oncost  or 
standing  charges  —  the  rent  and  interest,  the 
allowances  for  insurance  and  depreciation,  the 
office  expenses,  the  salaries  of  the  managerial  staff, 
and  all  the  rest  of  them — will  now  amount  to  a 
smaller  "loading"  on  the  labour  cost  of  each 
article  produced2  —  to  say  nothing  of  all  the 
indirect  advantages  of  expeditious  execution  of 
orders,  compliance  with  customers'  desire  for 
haste,  etc.  Hence,  as  it  seems  to  the  workman, 
there  is  absolutely  no  economic  or  ethical  justi- 
fication, and  no  commercial  compulsion,  for  a 
cutting  of  piecework  rates,  merely  because  it  is 
found  that  this  and  that  workman,  or  the  whole 
of  the  pieceworkers,  are  "  making  too  much  " — 

1  It  is  extraordinary  to  find  this  still  not  understood  by  engineer- 
ing writers.  "A  workman  may  gain  such  dexterity  at  piecework 
as,  by  largely  exceeding  the  original  output,  to  make  the  labour  cost 
of  a  given  article  excessive"  (The  Premium  System  of  Paying 
Wages  :  published  by  The  Engineer,  1917,  p.  6).  This  is,  of  course, 
not  the  case.  However  great  may  be  the  workman's  earnings  at 
piecework,  they  effect  no  increase  in  the  labour  cost  of  the  article. 
"There  is  then  the  tendency,"  proceeds  our  expert,  "on  the 
master's  part,  to  cut  the  rate,  with  the  result,  generally  speaking,  of 
trouble." 

-  "  It  must  be  remembered  that  in  the  engineering  trade  standing 
charges  and  interest  on  cost  of  machinery  amount  to  several  times  the 
wages  bill "  (Presidential  Address  of  Mr.  Michael  Longridge  to  the 
Institution  of  Mechanical  Engineers,  April  20,  1917,  p.  328). 


74    THE  WORKS  MANAGER  TO-DAY 

making,  that  is  to  say,  by  hitherto  unprece- 
dented celerity  or  intensity  of  effort,  or  continuity 
of  work,  the  three  or  four,  or  even  the  six  or 
eight  pounds  a  week  that  the  employer  chooses 
to  regard  as  "  too  much  "  for  any  workman.  The 
employer  is  not  losing  by  it — his  profits  are 
actually  being  increased  by  reason  of  the  in- 
crease in  the  man's  earnings.  The  customer  is 
not  losing  by  it ;  the  labour  cost  of  the  article 
is  actually  lowered.  All  that  has  happened  is 
that  the  workman,  invariably  with  a  greater 
expenditure  of  effort,  and  an  increased  strain  on 
his  constitution,  involving  (at  the  very  least)  a 
greater  expenditure  on  food,  has  been  induced 
to  work  harder,  to  work  quicker,  to  work  more 
incessantly,  to  work  more  economically  than 
before.  The  height  of  the  pieceworker's  earn- 
ings ought  (so  long  as  the  worker  does  not  over- 
strain himself  physically  or  mentally — a  very 
important  point)  to  be  regarded  as  a  triumph  of 
management. 

But  now  what  does  the  stupid  employer  do — 
and  I  fear,  also,  sometimes  the  stupid  professional 
manager,  who  ought  to  know  better  ?  Because 
he  can't  bear  to  see  the  "  mere  workman  "  draw 
so  many  pounds  at  the  end  of  the  week,  because 
he  finds  that  the  workmen  are,  as  he  quite 
frankly  says,  "  earning  too  much,"  he  cuts  the 


PAYMENT  BY  RESULTS  75 

rate.1  The  workmen  believe  that,  whether  the 
employer  expressly  orders  it  or  not,  the  foreman 
or  rate -fixer  practically  always  does  cut 
the  rate  in  this  way,  sooner  or  later,  frequently 
on  the  occasion  of  a  change  of  worker  or  of  some 
variation  in  the  job.  It  has,  in  fact,  been  proved 
by  a  whole  century  of  experience,  in  trade  after 
trade,  in  almost  every  country,  that  piecework 
rates  are — unless  properly  safeguarded — thus 
liable  to  insidious  degradation ;  so  that,  it 
nothing  is  done  to  prevent  it,  the  men  run  the 
risk  of  finding  themselves,  year  after  year,  doing 
more  work  in  return  for  smaller  and  smaller 
earnings ;  and  the  whole  security  for  the  main- 
tenance of  the  Standard  Rate  of  remuneration 
for  effort,  and  with  it  the  standard  of  life, 
disappears. 

The  temptation  to  cut  the  rate  is  increased  by 
the  fact  that  periodical  revisions  have  necessarily 
to  be  made.  When  improved  plant  is  put  in,  or 
special  jigs  or  fixtures  introduced,  or  some  im- 
provement of  the  process  is  devised,  by  which 

1  "Cutting  the  piece  price  is  simply  killing  the  goose  that  lays 
the  golden  egg,"  says  one  of  the  ablest  of  the  advocates  of  systems 
of  "Payment  by  Results."  But  he  continues,  in  words  which  are 
a  revelation  of  the  employer's  state  of  mind,  "  Nevertheless  the  goose 
must  be  killed.  Without  it  the  employer  will  continue  to  pay 
extravagantly  (1)  for  his  work  ;  with  it  he  will  stifle  the  rising 
ambition  of  his  men"  (F.  A.  Halsey,  "The  Premium  Plan  of 
Paying  for  Labor,"  Transactions  of  the  American  Society  of 
Mechanical  Engineers,  1891,  vol.  xii.  p.  756). 


76    THE  WOKKS  MANAGER  TO-DAY 

the  ".efforts  and  sacrifices  "  of  the  workmen  are 
decreased,  it  is  only  reasonable  that  the  old  rate 
should  be  revised  ;  and  the  Trade  Union  accepts 
this  revision  as  being  in  strict  conformity  with 
its  demand  for  a  maintenance  of  the  Standard 
Rate,  that  is  to  say,  for  uniformity  in  the  rate  of 
payment  per  unit  of  effort.1  But  when  no  such 
improvements  have  been  introduced,  and  the  job 
changes  merely  in  size  or  shape  or  content,  the 
new  rate  ought  to  be  arrived  at,  not  de  novo,  on 
the  day-rate  basis,  but  strictly  by  a  deviation 
from  the  old  rate  exactly  proportionate  to  the 
variation  in  the  amount  of  labour  involved.  This 
is  the  practice  under  the  Piecework  Lists  of  the 
boot  and  shoe  trades,  when  a  rate  has  to  be  fixed 
for  a  pattern  differing  from  those  listed.  Other- 
wise the  rate  is  being  cut ! 

Now,  without  stopping  to  argue  whether  this 
is  so  or  not,  what  the  practical  manager  has  to 
consider  is  what  will  be  the  effect  of  the  men 
getting  to  believe  that  their  piecework  rates  will 
be  cut,  or  that  the  system  of  Payment  by  Results 
that  he  introduces  does  not,  in  fact,  afford  an 

1  "  There  are,  of  course,  certain  conditions  under  which  the  employer 
is,  in  fact,  justified  in  reducing  the  rate,  for  example,  the  substitu- 
tion of  a  new  and  better  machine  for  an  old  one.  When  high-speed 
steel  was  introduced  into  their  works,  David  Rowan  &  Company 
reduced  rates  by  10  per  cent,  with  the  men's  agreement,  but  in  no  case 
were  smaller  premiums  earned"  (The  Premium  System  of  Paying 
Wages,  published  by  The  Engineer,  1917,  pp.  26-27). 


PAYMENT  BY  RESULTS  77 

automatic  safeguard  against  the  rates  being  cut. 
Surely,  it  is  as  plain  as  sunrise  that  the  result 
will  be  one  or  other  form  of  "  ca'  canny."  The 
"  two  customs,"  as  the  Minister  of  Munitions 
learnt  by  sad  experience,  "  are  dependent  upon 
one  another.  .  .  .  The  cutting  of  rates  of  pay  on 
piecework  so  as  to  limit  the  rise  of  earnings  .  .  . 
has  invariably  led  to  the  second  and  retaliatory 
practice  of  restriction  of  output." l  The  experi- 
ment has  now  been  repeatedly  tried.  In  one 
establishment  after  another  in  which  the  manage- 
ment has  succeeded  in  coaxing  or  bullying  the 
men  into  a  piecework  or  "premium  bonus" 
system,  without  Collective  Bargaining  over  the 
successive  rates,  and  without  the  security  of  a 
fixed  Piecework  List,  the  men  have  quickly 
found,  or  at  least  have  believed  that  they  found, 
that  any  increase  of  output  was  used  against 
them,  and  that  it  led  to  a  silent  reduction  of 
rates  in  future  jobs ;  and  this  fraud  by  the  em- 
ployer, as  they  deemed  it,  was  met  by  reprisals, 
in  the  form  of  a  more  or  less  definitely  concerted 
"  stint,"  or  limit  to  the  output  that  each  man 
would  make.  When  piecework  rates  are  cut, 
"the  act  of  cutting  them  is  looked  upon  as  a 
declaration  of  war.  The  employees  consider  it 
the  violation  of  an  agreement.  The  conclusion 

*  Hansard,  June  28,  1917,  p.  586. 


78    THE  WORKS  MANAGER  TO-DAY 

in  many  cases  is  that  the  management  introduced 
the  first  rates  as  a  bait  to  induce  the  men  to 
reveal  how  much  they  could  do,  while  the  second 
rates  constitute  the  springing  of  the  trap,  which 
is  designed  to  hold  the  men  for  the  new  standards 
of  working,  while  not  allowing  wages  to  exceed 
a  certain  moderate  excess  over  day  wages.  The 
response  of  the  workman  to  such  a  policy  is  to 
oppose  the  introduction  of  piece-rates,  but  where 
they  are  established  to  'soldier'  as  much  as 
possible  while  the  rates  are  being  set,  in  order 
to  get  a  long  time  base,  and  then  to  control  the 
pace,  so  that  the  wages  earned  will  never  rise 
above  the  point  which  is  thought  to  be  the 
maximum  the  employer  will  allow.  At  that 
rate  performance  is  pegged,  and  held,  against 
all  efforts  of  the  management  to  increase  it 
further."1  This  is  the  American  experience. 
That  of  Great  Britain  has  been,  in  trade  after  trade, 
much  the  same.  Thus,  the  employers'  plans  of 
Payment  by  Results,  although  they  had  produced 
a  certain  increase,  had  proved,  in  the  engineering 
industry  in  Great  Britain  before  the  war,  as  a 
device  for  securing  the  maximum  output,  nearly 
as  great  a  failure  as  timework  had  been ;  and  a 
failure  that  led  to  mutual  recriminations  and 

1  The    Administration    of  Industrial    Enterprises,    by    Edward 
D.  Jones,  1917,  pp.  251-2. 


PAYMENT  BY  RESULTS  79 

allegations  of  fraud.  Instead  of  a  steadily  rising 
output,  there  was  presently  a  stationary  or  even 
a  falling  output  per  operative.1  This  is  the  in- 
evitable reprisal  of  the  workshop  to  what  was 
believed  to  be  a  cutting  of  rates.  And  it  is  of 
no  use  to  condemn  the  workmen  for  defending 
themselves  in  this  way  against  being,  as  it  seemed 
to  them,  first  lured  into  giving  a  great  deal  more 
energy  and  effort  for  their  wages,  and  then 
deprived  of  part  of  those  enhanced  wages.  The 
manager  who  seeks  to  cut  piecework  rates  or 
reduce  bonus  times,  otherwise  than  in  exact 
correspondence  with  some  demonstrable  reduc- 
tion in  the  amount  of  work  involved,  proves  him- 

1  "  The  following  is  an  example  of  what  happens  under  an  ordinary 
bonus  system  when  times  are  reduced.  .  .  .  The  original  piece  time 
allowed  for  the  work  was  five  hours,  this  being  an  estimate  based  on 
the  time  taken  when  working  under  day  work.  .  .  .  The  workers 
completed  the  job  in  four  hours.  .  .  .  The  time  was  cut  to  four  hours, 
and  the  work  was  done  in  three  and  a  half.  ...  It  was  then  cut  to 
three  and  a  half  hours,  and  the  workers  completed  the  job  in  three 
hours.  Again  the  time  was  cut,  but  the  patience  of  the  workers  had 
reached  its  limit,  and  the  time  taken  was  seven  hours.  .  .  .  The  time 
was  immediately  increased  to  four  hours,  but  with  no  effect.  On 
increasing  the  time  to  the  original  five  hours,  the  workers  completed 
the  job  in  three  and  a  half.  .  .  .  Once  again  the  time  was  cut,  with 
the  result  that  "  the  workers'  suspicions  were  aroused,  and  the  time 
promptly  jumped  to  seven  hours.  The  workers  had  learnt  their  lesson. " 
In  this  case  the  labour  cost,  which  had  begun  at  8s.  10d.,  gradually 
sank  to  6s.  5d.,  but  jumped  up  to  14s.  when  "  the  workers  had  learnt 
their  lesson ! "  (A  Rational  Wages  System,  by  Henry  Atkinson, 
M.I.C.E.,  1917,  pp.  27-8). 

It  is  difficult  to  know  whether  to  blame  most,  the  dishonesty  or 
the  stupidity  of  the  management  which  can  teach  the  workman  such 
a  lesson. 


80     THE  WORKS  MANAGER  TO-DAY 

self  to  be  inadequately  trained  for  his  profession 
of  manager.  He  is  ignoring  human  nature.  To 
put  it  bluntly,  from  the  standpoint  of  achieving 
the  maximum  production,  he  is  behaving  like 
a  fool. 

The  problem  is  —  assuming  Payment  by 
Results  to  be  superior  in  many  respects  to  fixed 
Time  Wages — how  to  devise  a  system  which 
gives  the  workmen,  individually  and  collectively, 
not  merely  the  appropriate  initial  earnings,  but 
also  at  least  the  same  degree  of  effective  control 
against  an  insidious  lowering  of  the  rates  as 
employers  have,  in  all  decently  organised  trades, 
long  ago  conceded  with  regard  to  Standard  Time 
Rates.  If  any  employer  or  manager  thinks  that 
the  clock  can  be  set  back,  and  the  organised 
workmen  deprived  of  that  sort  of  control,  I  am 
afraid  that  I  cannot  congratulate  him  on  his 
perspicacity.  We  shall  not  nowadays,  in  Great 
Britain,  go  back  on  the  Principle  of  the  Common 
Rule,  as  applicable  to  wages ;  and  in  the  fixing 
and  application  of  that  Common  Rule,  the 
workmen,  whether  by  Collective  Bargaining  or 
by  Statutory  Wages  Boards,  or  in  some  other 
way,  are  inevitably  going  to  have  a  greater,  not 
a  smaller  share.  I  venture  to  suggest  that  the 
employer  of  the  future  will  individually  have 
the  option  of  engaging  or  continuing  in  the 


PAYMENT  BY  RESULTS  81 

industry,  and  of  deciding  what  products  shall 
be  made ;  but  he  will  not  be  allowed  to  decide 
individually  or  autocratically,  either  what  wages 
he  will  pay,  or  what  hours  shall  be  worked. 

Now  the  problem  of  how  to  get  an  acceptable 
system  of  Payment  by  Results,  alike  in-  the 
engineering  and  in  the  building  and  woodwork- 
ing industries,  is  one  into  which  more  brains 
will  have  to  be  put;  and  it  is  up  to  the  em- 
ployers and  managers,  much  more  than  to  the 
manual  workers,  to  find  the  necessary  brains. 
Clearly  what  we  have  to  get  rid  of  is  the  un- 
controlled "one-sidedness"  of  the  employer's 
decision  as  to  the  rate  or  premium  bonus  time 
to  be  allowed  for  each  job.  Some  such  arrange- 
ment as  that  of  the  "  checkweigher  "  in  the  coal- 
mining industry  will  need  to  be  made,  so  that 
the  arithmetical  basis  of  each  man's  earnings 
can  be  checked  and  verified  by  the  expert  re- 
presentative of  all  the  workmen,  who  will 
probably  (like  the  checkweighman)  be  nominated 
and  paid  by  the  workmen  themselves.  Whether 
such  an  official  will  be  developed  out  of  the 
"Shop  Steward";1  whether  he  will  (like  the 

1  The  Shop  Stewards  are  recognised  by  the  engineering  employers 
of  the  Clyde  (and  in  most  districts  of  the  North  of  England)  as  "the 
official  Trade  Union  representatives  in  the  shop  "  ;  and  their  duties, 
as  stated  by  a  leading  employer,  "  comprise  reporting  any  grievances, 
keeping  a  strict  eye  that  no  infringement  of  Trade  Union  rights 


82     THE  WORKS  MANAGER  TO-DAY 

"Father  of  the  Chapel"  in  a  printing  establish- 
ment) continue  to  work  at  his  trade,  and  merely 
exercise  his  functions  of  verification  and  audit 
of  the  men's  earnings  in  the  intervals  of  his  own 
jobs ;  or  whether  he  will  be  a  salaried  officer  of 
the  Trade  Union,  like  the  secretaries  of  the 
Cotton  Operatives  or  the  "  Investigators "  of 
the  Boot  and  Shoe  Operatives,  will  be  a  matter 
for  the  workmen's  consideration.  Moreover, 
there  may  possibly  be  two  such  officers ;  one 
acting  for  a  workshop,  and  confining  himself 
(like  the  checkweighman)  to  verification  and 
audit  of  the  earnings  according  to  the  agreed 
basis ;  and  the  other  serving  all  the  workshops 
of  the  industry  within  each  district,  and  called 
in  (like  the  secretary  of  the  Birmingham  Brass- 
workers)  only  when  a  rate  has  to  be  fixed  anew, 
either  on  a  change  of  process,  or  on  a  variation 
of  material,  or  merely  on  some  difference  in  the 
size  or  shape  of  the  article  to  be  made.  It  is 
difficult  to  see  how,  without  some  such  arrange- 
ment, the  workmen  can  be  expected  to  feel  any 
assurance  in  the  honesty  and  accuracy  of  the 

takes  place,  and  generally  the  safeguarding  of  the  interests  of  the 
Union  in  individual  shops.  In  many  cases  their  functions  are 
performed  with  judgment  and  discretion,  but  they  exercise  in 
almost  every  establishment  an  intangible  but  very  real  effect  in 
moulding  the  management  and  conditions  of  the  shop  "  (Some  Aspects 
of  Labour  and  its  Claims  in  the  Engineering  'Industry,  by  J.  K. 
Richmond,  1917,  p.  13). 


PAYMENT  BY  RESULTS  83 

calculations  of  the  employer's  foreman  or  rate- 
fixer  ;  or  any  confidence  that,  at  some  future 
date,  the  employer  or  the  manager  may  not, 
quite  honestly,  decide  that  it  is  necessary  or 
permissible  to  lower  the  rate  or  reduce  the  time. 
If  the  employer  or  manager  would,  for  a  moment, 
imagine  himself  in  the  workman's  place,  he  could 
not  fail  to  realise  that  no  man  of  common  sense 
could  feel  any  confidence  in  a  decision  where, 
without  verification,  control,  or  audit,  either 
joint  or  independent,  one  of  the  parties  to  a 
bargain  insists  on  settling,  without  appeal,  a 
complicated  issue  which  vitally  affects  the 
bargain  for  the  other  party.1  Obviously,  no 

1  I  assume  that  it  is  unnecessary  to  warn  you,  in  the  twentieth 
century,  against  the  delusive  and  discredited  idea  of  "Profit- 
sharing,"  which  is  anathema  to  the  workmen,  and  may  be  relied 
on  (except  with  quite  unorganised  and  defenceless  workers)  to 
create  friction,  distrust,  and  trouble.  So  long  as  the  "capitalisa- 
tion "  of  the  concern,  the  fixing  of  the  rate  of  interest  on  capital, 
the  determination  of  the  remuneration  of  the  managing  partners  or 
directors,  and  of  the  salaries  of  the  management  remain  beyond  the 
control  of  the  wage-earners — to  say  nothing  of  other  methods  of 
"cutting  the  melon,"  and  of  carrying  sums  to  depreciation,  reserves, 
and  repayment  of  capital — any  plan  of  profit-sharing  is  in  the  nature 
of  a  "  blind  pool,"  in  which  the  operatives  have  not  the  least  security 
that  they  will  not  be  defrauded.  "In  this  light  the  profit-sharing 
plan  is  seen  to  be  an  agreement  between  two  parties,  the  first  of 
which  has  every  temptation  and  opportunity  to  cheat  the  second, 
while  the  second  has  no  means  of  knowing  if  he  has  been  cheated, 
and  no  redress  in  any  case "  (F.  A.  Halsey,  "  The  Premium  Plan 
of  Paying  for  Labor,"  Transactions  of  the  American  Institute  of 
Mechanical  Engineers,  1891,  vol.  xii.  p.  756).  See  for  other  objections, 
Profit-sharing  a  Fraud  and  a  Delusion,  by  Edward  R.  Pease  (Fabian 
Society,  25  Tothill  Street,  Westminster,  price  Id.). 


84    THE  WORKS  MANAGER  TO-DAY 

employer  or  manager  would  allow  the  workman 
such  a  privilege.  The  workman  has,  therefore, 
the  support  of  public  opinion,  as  of  Political 
Economy,  in  refusing  to  allow  it  to  the  employer. 
No  one  can  be  trusted  to  be  judge  in  his  own 
cause.1 

It  must  be  owned  that  the  problem  thus 
presented  to  the  manager  in  an  engineering 
establishment  is  a  hard  one.  If  piecework  has 
been  introduced,  or  one  of  the  various  systems 
of  bonus  or  reward,  the  task  of  arriving  at 
exactly  the  right  rate  for  the  job,  or  the  "  base 
time  "  or  "  standard  time,"  is  one  of  great  com- 
plication and  difficulty.  This  is  an  old  story. 
Already  in  1727,  in  a  manual  of  estate  manage- 
ment, naive  directions  were  given  how  the  piece- 
work rate  is  to  be  fixed.  "  Also  if  any  new  sort 
of  work  is  to  be  done,  not  mentioned  in  the 
following  particulars,  the  Steward's  best  way 
is  to  hire  a  good  labourer,  and  to  stand  by  him 
the  whole  day,  to  see  that  he  does  a  good  day's 

1  The  necessity  for  the  participation  in  the  fixing  of  rates  or  times 
for  particular  jobs  is  coming  slowly  to  be  recognised  by  British 
advocates  of  bonus  or  reward  systems.  "The  Trade  Union  must 
also  see  that  time  studies  are  properly  made.  .  .  .  The  Trade 
Union  engineer  should  be  sent  to  the  factory  to  study  one  or  two 
representative  jobs.  He  will  do  this  side  by  side  with  the  employer's 
engineer.  ...  A  comparison  between  the  times  thus  obtained,  and 
the  firm's  standard  times  will  show  at  once  whether  the  complaint 
is  well-founded"  (A  Eational  Wages  System,  by  Henry  Atkinson, 
M.I.M.E.,  1917,  p.  46). 


PAYMENT  BY  RESULTS  85 

work,  and  then  to  measure  the  same,  in  order 
to  know  what  it  is  worth."1  In  the  hurry  of 
modern  industry  such  close  and  continuous 
supervision  is  often  unpracticable.  A  workman 
or  a  set  of  workmen  will  be  given  a  new  job  to 
do  "on  time "  to  see  how  long  it  takes.  We 
cannot  ignore  the  fact  that  cunning  is  met  by 
cunning ;  and  that  whenever  a  new  rate  has  to 
be  fixed  for  a  new  job,  and  there  is  an  experi- 
mental working  of  a  provisional  rate,  the  work- 
men set  their  wits  against  those  of  the  rate- 
fixer,  and  sometimes  display  a  most  astonishing 
capacity  for  concealing  the  speed  at  which  they 
are  really  able  to  complete  the  job.  If  I  were 
addressing  a  meeting  of  workmen,  I  should  deal 
fully  with  their  shortcomings.  But  for  our 
present  purpose  it  must  suffice  to  recognise 
these  practices  merely  as  difficulties  with  which 
the  management  has  to  cope.  The  employer, 
or  rather  the  foreman,  retaliates,  first  of  all  by 
driving  as  hard  a  bargain  as  he  can  over  the 
piecework  rate ;  and  then  by  cutting  the  rate 
if  he  thinks  he  has  been  "  done  "  by  the  concerted 
limitation  of  output  by  the  workmen.2 

1  The  Duty  of  a  Steward  to  his  Lord,  by  Edward  Lawrence,  1727 ; 
Industrial  Democracy,  by  S.  and  B.  Webb,  p.  292. 

2  The  position  is  thus  described  by  an  engineering  expert.     "A 
job  is  priced  at,  say,  Is.    An  average  man  whose  race  is  40s.  a  week 
will  earn  about  50s.  a  week  on  that  job  by  diligent  work.     Then  a 


86     THE  WORKS  MANAGER  TO-DAY 

The  only  remedy  seems  to  be  that  those 
managers  who  wish  to  substitute  a  system  of 
Payment  by  Results  for  a  time  work  wage  must 
"  study  the  job  "  in  the  way  that  the  American 
"  Efficiency  Engineers "  have  taught  us ;  and 
determine  (unlike  the  American  practice)  jointly 
iviih  the  Trade  Union  official,  and  with  his 
agreement,  what  is,  objectively,  and  indepen- 
dent of  the  volition  of  any  particular  workman, 
the  time  necessarily  taken  by  an  average  man, 
with  reasonable  diligence.  This  is  not  a  matter 
which  the  employer  can  claim  autocratically  to 
determine.  He  must,  if  he  is  to  secure  the 
cordial  and  continued  assent  of  the  workmen, 
consent — as  all  the  employers  in  the  very  suc- 

really  first-class  man  comes  along  and  earns  80s.  What  follows? 
If  Smith  can  earn  80s.  it  is  evident  that  the  price  is  too  high,  and 
the  other  workers  are  slacking.  That  is  the  natural  argument  of  the 
employer,  and  down  comes  the  rate.  Cutting  rates  is  one  of  the 
most  frequent  sources  of  trouble  on  piecework,  but  it  cannot  be 
avoided.  The  worker  knows  that  the  rates  will  be  cut,  and  there- 
fore two  methods  of  defence  are  open  to  him.  First,  he  always 
works  slowly  on  a  job  until  it  has  been  priced.  In  this  way  a  good 
price  is  obtained,  a  price  which  enables  the  slowest  worker  to  earn 
his  wages — and  a  bit  above — easily.  Second,  the  worker  takes  care 
not  to  earn  too  much.  It  is  arranged  between  the  men  how  much 
each  ought  to  take  on  a  certain  job,  and  the  arrangement  made  is 
carried  out.  This  is,  of  course,  dishonest,  but  it  is  necessary.  For 
suppose  a  good  worker  comes  on  the  job  and  does  his  best,  the  price 
comes  down  to  everybody,  and  the  average  man  cannot  earn  his 
wages.  The  good  man  is  therefore  compelled  to  be  dishonest  to  his 
employer,  or  unfair  to  his  fellow-worker  "  (A  Rational  Wages  System, 
by  Henry  Atkinson,  M.I.M.E.,  1917,  p.  7). 


PAYMENT  BY  RESULTS  87 

cessful  Lancashire  cotton  industry  have  long 
ago  consented — to  let  the  study  of  the  job  be 
a  matter  for  Collective  Bargaining,  and  joint 
decision  by  the  expert  officials  representing  the 
two  sides  to  the  bargain.  The  question  is  by 
what  devices  or  with  what  machinery  this  can 
be  best  done. 

What  is  often  not  realised  by  managers  in 
the  engineering,  building,  and  wood-working 
industries  is  that  exactly  the  same  kind  of  in- 
tellectual problem  has  plagued  other  industries 
in  the  past;  and  in  some  it  has  been  more 
or  less  satisfactorily  solved.  The  difficulty  has 
been  overcome — notably  in  cotton  spinning  and 
weaving,  and  in  boot  and  shoe  manufacture — 
by  the  device  of  the  Piecework  List,  the  elaborate 
statement,  arrived  at  by  Collective  Bargaining, 
which  fixes  the  price  or  rate  for  every  conceivable 
job  and  provides  in  advance  for  variations  of 
rate  in  exact  proportion  to  the  amount  of  varia- 
tion from  the  nearest  listed  pattern,  the  whole 
being  practically  imposed  on  every  employer 
and  on  every  district  by  the  national  Employers' 
Associations  and  the  national  Trade  Unions,  and 
applied  to  particular  cases  by  paid  officials,  re- 
presenting the  employers  as  a  whole  and  the 
workmen  as  a  whole,  or  by  an  umpire  chosen 
by  the  couple,  independent  of  either  the  indi- 


88     THE  WORKS  MANAGER  TO-DAY 

vidual  employer  or  the  individual  workman 
concerned.  This  device  of  the  Piecework  List 
may  be  inapplicable  to  the  present  stage  of 
development  of  the  engineering  or  the  building 
industry — though  I  should  be  a  little  slow  to 
believe  this  to  be  a  complete  objection — partly 
because  the  successive  jobs  are  often  so  widely 
different  from  each  other,  and  partly  because 
the  relative  amount  of  machinery  and  labour- 
saving  devices  differs  so  materially  from  estab- 
lishment to  establishment.  But  "  shop  lists " 
preceded  District  Lists,  and  District  Lists 
National  Lists,  even  in  the  cotton  industry ; 
and  there  does  not  seem  any  obvious  impractica- 
bility in  "shop  lists"  being  framed,  and  jointly 
established,  in  the  several  factories,  for  all  the 
steadily  increasing  amount  of  standardised  or 
repetition  work. 

Another  device,  which  we  may  call  that  of 
the  Joint  Rate-fixers,  is  one  which  has  been 
successful  among  the  coalminers  in  Northumber- 
land and  certain  other  districts.  Here  the 
problem  is  to  translate  an  agreed  day  rate  into 
an  appropriate  piecework  rate  per  ton  of  coal 
hewn  in  "  places  "  of  very  varying  ease  of  working. 
This  rate  is  fixed  for  each  place  in  each  seam  in 
each  colliery,  on  the  application  of  the  manage- 
ment or  of  the  miner,  by  a  couple  of  salaried 


PAYMENT  BY  RESULTS  89 

officers,  both  independent  of  the  particular 
concern,  who  find  no  difficulty  in  agreeing,  one 
representing  the  Coalowners'  Association  and  the 
other  the  Trade  Union.  And  lest  any  managers 
of  engineering  works  may  think  that  the  example 
of  a  coal-mine  can  teach  them  nothing,  I  may 
remind  them  that  essentially  this  same  device 
has  long  worked  with  complete  success  in  the 
Birmingham  brassworking  trade  —  actually  a 
humble  branch  of  engineering  —  where  the 
employers  habitually  have  a  new  job  "priced," 
practically  as  by  an  independent  rate-fixer,  by 
Mr.  W.  J.  Davies,  the  very  experienced  and 
trusted  Secretary  of  the  Brassworkers'  Trade 
Union. 

Short  of  any  such  system  of  joint  fixing  of 
rates  there  is  the  imperfect  solution  hit  upon 
some  years  ago  by  some  of  the  districts  of  the 
Amalgamated  Society  of  Engineers,  which  we 
may  call  the  Device  of  the  Guaranteed  Minimum 
for  Piecework  Intensity,  namely  the  agreement 
with  the  employers  that,  whilst  the  piecework 
rates  should  always  be  uniform  for  all  the  men, 
no  man  employed  in  any  shop  in  which  Payment 
by  Results  prevailed — whether  or  not  the  indi- 
vidual happened  to  be  thus  paid — should  ever 
draw  less  than  "  Time  and  a  Third  "  for  the  week's 
work,  however  little  his  own  piecework  earnings 


90    THE  WORKS  MANAGER  TO-DAY 

might  fall  to.  The  economist  could  not  advise 
the  Trade  Unions  to  accept  this  Device  of  the 
Guaranteed  Minimum  for  Piecework  Intensity 
as  any  security  against  a  cutting  of  rates.  This 
would  still  remain  within  the  employer's  power. 
Nor  could  the  economist  advise  the  employer 
that  this  device  would  (unless  the  employer  or 
his  rate-fixer  were  exceptionally  careful)  prevent 
all  "  ca'  canny."  But  the  employer  or  his  rate- 
fixer  would  know  that  if  the  rates  were  cut  to 
such  an  extent  that  the  slowest  man  in  the  shop 
— the  slowest  whom  the  employer  elected  to 
retain  at  all — did  not,  in  fact,  earn  "  Time  and 
a  Third,"  the  men  would  not  be  stimulated  to 
piecework  intensity  of  effort,  and  that  (secure  of 
that  minimum)  they  would  drop  back  to  time- 
work  speed.  Any  cutting  of  rates  would  thus, 
at  least,  work  within  the  friction -brake  of  it 
not  paying  the  employer  to  cut  below  that 
minimum ;  and,  if  the  employer  and  his  rate- 
fixer  always  remembered  this  fact,  and  never 
made  mistakes,  there  would  be  little  temptation 
to  "  ca'  canny."  1 

1  There  is  less  objection  on  the  part  of  the  employees  to  systems 
of  "  Group  Piecework,"  but  they  necessitate,  no  less  than  do  systems 
of  individual  "Payment  by  Results,"  effective  protection  against  a 
subsequent  cutting  of  rates.  The  basic  Standard  Rate  requires 
equally  to  be  fixed,  and  its  equivalent  in  piecework  rates  secured, 
by  Collective  Bargaining  with  the  Trade  Union  (not  merely  with 
the  group  of  workers  concerned).  The  "Group  Bonus"  granted  by 


PAYMENT  BY  RESULTS  91 

Finally,  I  do  not  know  whether  employers 
in  the  engineering  industry  will  take  seriously 
the  proposal  made  by  some  Trade  Union 
Branches,  when  pressed  in  1917  to  substitute 
a  system  of  Payment  by  Results  for  the  time 
rates  to  which  the  workmen  had  been  accustomed, 
that  the  change  might  be  agreed  to  on  condition 
that  the  pricing  of  the  successive  jobs  was  left 
to  the  workmen  themselves.  After  all,  when  one 
comes  to  think  about  it,  it  seems  no  more  un- 
reasonable for  the  seller  of  the  commodity — in 
this  case,  labour — to  fix  the  price  (which  the 
buyer  may  accept  or  refuse)  than  for  the  buyer 
to  fix  the  price,  for  the  seller  to  accept  or  refuse. 
In  the  abstract,  the  men  appear  to  be  as  much 
entitled  to  name  a  price  for  the  labour  that  they 
put  into  each  job,  as  the  capitalist  employer 
who  is  the  purchaser  of  that  labour.  With  the 
proviso  that  the  basis  of  computation  shall  be 
the  Standard  Time  Rate  (say  "Time  and  a 
Quarter  " ),  and  with  arrangements  for  a  prompt 
appeal  against  an  erroneous  calculation  to  a 


Cadbury  Brothers,  Limited,  to  some  of  its  workers,  where  the  bulk 
of  the  remuneration  is  by  way  of  time  wages,  but  a  bonus  dependent 
on  the  group  output  is,  in  addition,  shared  by  the  workers  in  each 
group,  requires,  in  theory,  the  same  safeguards  to  ensure  that  some 
subsequent  management  shall  not  be  able  to  vary  the  terms  or 
reduce  the  time  wage  or  the  bonus,  without  Collective  Bargaining 
(Experiments  in  Industrial  Organisation,  by  Edward  Cadbury). 


92     THE  WOKKS  MANAGER  TO-DAY 

couple  of  officers  independent  alike  of  the 
particular  firm  and  of  the  particular  workmen, 
and  charged,  by  the  Trade  Union  on  the  one 
hand  and  by  the  Employers'  Association  on  the 
other,  to  maintain  absolute  uniformity  between 
job  and  job  in  the  rate  of  payment  per  unit 
of  effort,  the  plan  of  letting  the  workmen  put 
their  own  price  on  their  labour  may,  in  particular 
cases,  be  worth  consideration. 

What  has  ultimately  to  be  found,  for  the 
smooth  running  of  any  industry,  is,  however, 
some  system  which  can  be  made  of  general 
application  to  all  establishments  in  each  industry. 
The  very  great  lack  of  uniformity  of  equipment 
among  engineering  workshops,  even  those  making 
the  same  articles,  here  presents  itself  as  a 
difficulty  to  be  overcome.  Further,  what  is 
everywhere  required  is  some  automatically 
working  device  for  ensuring  that  the  payments 
for  successive  jobs  in  the  same  shop  shall  be 
absolutely  and  inflexibly  uniform  in  the  rate 
per  unit  of  effort;  and  for  ensuring  that  this 
same  inflexibly  uniform  rate  shall  be  as 
identical  as  the  Standard  Time  Rate  for  all 
the  establishments  in  the  same  district,  and, 
indeed,  all  over  the  kingdom.1  Until  this  is 

1  It  may  be  said  that  employers  will  not  submit  to  any  outside 
control  over  the  piecework  rates  or  bonus  times  for  particular  jobs. 


PAYMENT  BY  KESULTS  93 

discovered  for  the  engineering  and  building 
trades — as  it  has  been  in  the  cotton  trade 
— and  the  workmen  and  their  Trade  Unions 
are  thereby  put  in  a  position  not  only  to  verify 
the  calculations  but  also  to  detect  and  prevent 
any  future  degradation  of  rates,  our  progress 
will  be  imperfect.  The  employers  may  be 
warranted  in  their  feeling  that  some  system  of 
Payment  by  Kesults  is  necessary  for  efficiency ; 
but  the  Trade  Unions  are  no  less  justified  in 
asking  the  employers — before  inviting  the  work- 
men to  give  up  what  the  economists  tell  them 
is  an  indispensable  safeguard  and  protection  of 
their  Standard  of  Life — at  any  rate  to  wait  until 
those  who  advocate  the  new  system  of  remunera- 
tion have  so  perfected  it  as  to  make  it  give  at 
least  the  same  degree  of  security  to  the  workers 
as  it  offers  in  the  way  of  advantage  to  the 
employers. 

The  future  organisation  of  industry  is  going 

But  some  such  control  over  piecework  rates — both  collective,  ousting 
the  individual  employer,  and  joint,  foregoing  the  employers' 
autocracy  —  is  now  contemplated  by  the  most  enlightened  repre- 
sentatives of  the  employers.  Thus  the  President  of  the  Institute  of 
Mechanical  Engineers  for  the  current  year  (Mr.  Michael  Longridge) 
proposes  that  the  "  District  Executive  "  of  the  "  British  Engineering 
Association"  would  "be  charged  with  the  oversight"  of  all  the 
firms  in  the  district.  "  In  conjunction  with  the  district  officers  of  the 
Trade  Unions  they  would  arrange  rates  of  wages  and  piecework" 
(Presidential  Address,  Institution  of  Mechanical  Engineers,  April  20, 
1917). 


94    THE  WORKS  MANAGER  TO-DAY 

to  involve  two  leading  principles  from  which 
employers  have  hitherto  shrunk,  namely,  as 
regards  all  the  arrangements  of  their  factories, 
the  most  complete  Publicity ;  and,  as  regards 
the  remuneration  of  the  workmen  employed,  the 
most  minutely  accurate  Measurement.  Both 
are  needed  to  permit  of  the  fullest  advantage 
being  taken  of  Collective  Bargaining.  Are  the 
Works  Managers  of  to-day  prepared  to  advise 
their  employers,  as  the  President  of  the  Institu- 
tion of  Mechanical  Engineers  has  recommended,1 
that  not  only  Standard  Time  Wages  but  also 
piecework  rates  or  premium  bonus  times  should 
be  settled,  not  by  the  individual  management, 
but  jointly,  for  each  district,  by  the  Associa- 
tions of  Employers  and  the  Trade  Unions  ? 

Returning  to  the  immediate  problem  involved 
in  the  "Restoration  of  Trade  Union  Conditions" 
after  the  war — in  so  far  as  this  means  discon- 
tinuing all  the  systems  of  Payment  by  Results 
introduced  in  the  Controlled  Establishments  and 
elsewhere  during  the  war — we  must  all  be  afraid 
that,  unless  the  Government  helps  the  industry 
by  a  timely  and  satisfactory  declaration  of 
policy,  managers  will  find  themselves  faced  with 
trouble.  After  all,  it  was  the  Government  that 
got  the  Trade  Unions  to  agree  to  lay  aside 
1  ibid. 


PAYMENT  BY  RESULTS  95 

their  customs,  and  it  was  the  Government  that 
guaranteed  the  restoration,  in  every  case,  of 
the  "pre-war  practice"  of  the  workshop.  It  is 
therefore  primarily  for  the  Government  to  find 
a  way  out  of  the  dilemma  involved  in  any 
inability  to  fulfil  the  Government's  solemn 
promise.  Employers  holding  Government  con- 
tracts have,  it  is  true,  individually  pledged 
themselves  in  writing  that  all  the  changes  made 
in  their  workshops  shall  be  for  the  period  of  the 
war  only ;  and  they  are  liable  to  be  prosecuted 
in  the  Munitions  Tribunals  for  any  failure  to 
comply  with  this  undertaking.  But  such 
litigation  is  not  feared.  There  will  be  more 
than  one  way  of  escaping  from  the  purely 
statutory  requirements,  which  the  judges,  it  is 
believed,  will  construe  very  narrowly. 

The  greatest  difficulty  before  managers  lies, 
perhaps,  in  the  fact  that  some  of  the  leading 
employers  in  particular  industries  have  made  no 
secret  of  the  fact  that  they  must  and  will,  for 
the  future,  be  "  masters  in  their  own  factories," 
by  which  they  mean  that  they  will  adopt  what 
method  of  remuneration  they  please,  for  what 
kind  of  labour  they  please,  and  fix  for  each  job 
for  each  worker  whatever  piecework  rate  they 
think  reasonable.  They  do  not  claim  actually 
to  compel  (after  the  expiry  of  the  Munitions 


96     THE  WORKS  MANAGER  TO-DAY 

Act)  any  person  to  work  on  these  terms,  but 
"  he  can  take  it  or  leave  it."  They  seem  to 
rely  on  the  presence  in  the  Labour  Market  of 
the  four  or  five  million  men  disbanded  from  the 
army,  the  three  million  discharged  munition 
workers,  the  million  extra  women  who  have 
come  into  industry,  and  the  two  or  three 
hundred  thousand  partially  disabled  soldiers 
seeking  employment  to  eke  out  their  pensions, 
in  order  to  enable  them  to  fill  their  factories — at 
any  rate  their  newly  established  factories — 
with  docile  acceptors  of  their  terms.  Any  such 
action  would  be  in  flagrant  violation  of  the 
pledge  given  by  the  Government,  and  embodied 
in  the  Munitions  Act,  that  the  status  quo  ante 
should  be  restored  after  the  war.  But  such 
employers  declare  that  any  real  fulfilment  of 
that  pledge  means  the  ruin  of  their  industry, 
and  if  its  nominal  fulfilment  in  the  old  factories 
is  legally  insisted  on,  new  factories  will  be 
started  on  the  new  system ;  whilst  even  in  the 
old  factories  there  is  nothing  in  the  pledge  to 
prevent  the  new  system  being  brought  in  twelve 
months  later.  It  is  easy  to  see  that  such  a 
decision  by  the  engineering  employers  will  lead 
to  the  most  serious  industrial  war. 

We   can,    of    course,    see    the   force   of    the 
employers'  contention  that  under  the  old  system 


PAYMENT  BY  RESULTS  97 

of  entrusting  all  kinds  of  engineering  or  building 
work  to  skilled  handicraftsmen  at  fixed  weekly 
wages — keeping  the  labourers  or  the  women  to 
strictly  mechanical  jobs — the  labour  cost  was 
unnecessarily  high,  and  that  without  any  real 
advantage  to  the  craftsmen.  To  use  a  skilled 
craftsman  for  operations  which  have  been  proved 
to  be  within  the  capacity  of  a  labourer  or  a  woman 
after  only  a  few  weeks'  practice  is  a  waste  of 
industrial  capacity.  Moreover,  it  cannot  be 
denied  that,  at  time  wages — unless  there  is  an 
amount  of  supervision  and  of  "  driving "  which 
are  both  very  objectionable — there  has  been,  by 
a  certain  proportion  of  the  workmen,  a  great 
deal  of  deliberate  "skulking"  and  waste  of  time, 
whilst  for  the  whole  shop  the  pace  is  needlessly 
slow.1  All  this  has  been,  in  some  cases,  simply 

1  It  must  not  be  altogether  forgotten  that  the  workman's  "idleness" 
is  sometimes  his  method  of  defence  against  "driving."  It  has  been 
left  for  an  American  author  to  point  out  that  some  managers  "have 
created  conditions  under  which  it  has  been  more  troublesome  and 
more  dangerous,  and  less  profitable  for  the  workman  to  call  attention 
to"  the  ill-considered  strain  or  pressure  which  actually  interfered 
with  maximum  production,  "  than  to  retard  the  pace  by  slipping  in 
secret  recuperation  periods  throughout  the  day."  "If  a  wrongly 
placed  lever  has  called  for  more  fatigue  than  the  labourer  could 
regularly  absorb  at  the  pace  which  the  demonstrator  used  for  a 
brief  test,  there  has  been  the  opportunity  of  interposing  unnecessary 
stoppages  when  the  head  of  the  boss  was  turned.  Thus  the  machine 
has  continued  to  seem  the  acme  of  perfection  to  its  builders,  although, 
for  mysterious  reasons,  the  users  have  never  received  the  expected 
results"  (The  Administration  of  Industrial  Enterprises,  by  Edward 
D.  Jones,  1917,  p.  224). 

H 


98     THE  WORKS  MANAGER  TO-DAY 

scandalous.  Public  opinion  will  itself  demand 
a  systematic  "  speeding  -  up "  of  production. 
The  difficulty  is  that,  whilst  neither  the  Trade 
Unions  nor  Parliament  will  allow  a  return  to 
autocracy  in  the  factory,  neither  public  opinion 
nor  the  employers  will  permit  a  reversion — 
which  the  Government  has  expressly  promised 
— to  the  pre-war  practice.  The  question  is 
whether  there  is  really  any  way  out  other  than 
some  plan  of  joint  control,  putting  in  force  some 
device  for  automatically  preventing  any  future 
cutting  of  piecework  rates  or  bonus  times ; 
coupled  with  some  form  of  statutory  security 
for  the  maintenance  of  the  Standard  Rates, 
and  some  definite  undertaking  by  the  Govern- 
ment that  it  will — in  ways  the  practicability  of 
which  its  own  officials  well  recognise — systemati- 
cally prevent  all  extensive  or  long- continued 
involuntary  unemployment.1 

1  The  Restoration  of  Trade  Union  Conditions,  by  Sidney  Webb. 


VII 


THE  MANAGEMENT  SHOULD  HAVE 
NOTHING  TO  DO  WITH  THE  RATE 
OF  WAGES 

IT  is,  to  me,  appalling  to  think  of  the  extent  to 
which  the  time  and  thought  of  the  management 
is  still  taken  up  with  wages  questions,  with 
which,  in  a  properly  organised  industry,  the 
employer  or  the  manager  ought  not  to  be 
troubled  at  all.  Indeed,  in  the  best  organised 
British  industries,  as  we  may  expect  them  more 
and  more  to  be  developed,  the  management  of 
any  particular  concern  will  have  no  more  to  do 
with  fixing  wages  or  altering  piecework  prices 
or  bonus  times  than  it  has  to  do  with  varying 
the  hours  determined  by  the  Factory  Act,  or 
with  changing  the  rates  prescribed  under  the 
Trade  Boards  Act.  We  may,  indeed,  lay  it 
down  as  an  axiom  of  industrial  efficiency,  that 
neither  the  manager  nor  the  employer  has  any 


100    THE  WORKS  MANAGER  TO-DAY 

concern  with  the  rates  of  pay  of  the  operatives. 
They  ought  to  have  no  more  to  do  with  the 
wages  that  are  paid  in  their  own  establishment 
than  with  those  that  are  paid  elsewhere.  This 
may  sound  to  you  paradoxical.  Yet  you  will 
see  that  it  follows  logically  from  the  principle  of 
the  Standard  Rate,  which  is  fixed  for  the  industry 
as  a  whole.  Nor  is  it  a  dream.  I  may  remind 
you  that  this  is  actually  what  prevails  and  has 
long  prevailed  in  one  of  our  largest  British 
industries — perhaps  that  in  which  we  stand, 
as  regards  technical  efficiency,  highest  in  the 
world — I  mean  cotton  spinning  and  cotton 
weaving.  The  owner  of  a  Lancashire  cotton 
mill,  or  his  manager,  is  not  allowed  to  decide 
what  wages  he  will  pay  to  any  spinner  or 
weaver  in  his  employment.  He  must  pay,  as  a 
minimum,  whether  he  likes  it  or  not,  according 
to  the  Standard  List  of  Prices  fixed  for  his 
district  by  the  joint  decision  of  the  Employers' 
Association  and  the  Trade  Union ;  just  as  he 
must  work,  as  a  maximum,  the  hours  prescribed 
by  the  Factory  Act.  If  the  mill  is  on  a  dis- 
advantageous site,  or  is  equipped  with  old- 
fashioned  machinery,  or  has  bought  cotton 
injudiciously,  or  has  cut  selling  prices  too  fine 
in  the  eagerness  for  business,  none  of  these 
things  is  admitted  as  an  excuse  for  paying  lower 


MANAGEMENT  AND  WAGES       101 

rates  of  wages,  any  more  than  it  is  for  working 
more  than  the  Normal  Day.1  Why  should  the 
burden  of  these  blunders  be  put  on  the  work- 
people ?  What  is  more  practical  is  the  question, 
How  would  it  profit  such  a  mill,  and  how  enable 
it  to  overcome  its  disadvantages,  for  it  to  attract 
only  the  less  competent  and  less  regular  opera- 
tives, and  to  get  from  them  more  unwilling  and 
more  indifferent  service  than  the  other  mills 
were  obtaining — which  would  be  the  inevitable 
consequence  of  paying  less  than  the  Standard 

1  Far  from  being  able  to  obtain  any  reduction  of  wages,  the 
concern  which  is  at  the  disadvantage  of  having  old-fashioned 
machinery,  or  which  fails  to  run  its  machinery  up  to  the  average 
speed  or  with  normal  regularity,  or  which  buys  bad  raw  material, 
is  required,  in  the  cotton  industry,  to  pay  actually  higher  rates  than 
the  Standard  List,  as  there  is  no  reason  why  the  operatives  should 
suffer  from  the  defects  due  to  the  owner's  incompetence.  After 
joint  investigation  by  the  secretaries  of  the  Employers'  Association 
and  the  Trade  Union,  the  firm  so  falling  behind  the  average  is 
required  to  add  5  or  10  per  cent  to  the  Standard  List.  From  the 
standpoint  of  national  efficiency  it  is  greatly  to  be  desired  that  this 
practice  should  be  introduced  into  other  industries.  It  should  be 
made  a  part  of  any  development  of  the  Trade  Boards  Act,  or  other 
legal  minimum  wage  systems,  where  piecework  is  adopted.  It  has 
had  a  marvellous  effect  in  the  Lancashire  cotton  industry  in 
exerting  a  perpetual  silent  pressure  towards  the  elimination  of 
concerns  that  were  badly  managed,  or  which  failed  to  keep  their 
equipment  up  to  the  ever-rising  standard,  or  which  lagged  behind  in 
the  adoption  of  technical  improvements.  When  Trade  Unionism  is 
blamed  for  a  policy  of  opposition  to  improvements,  the  really  fine 
achievements  of  the  Lancashire  Cotton  Operatives  in  the  other 
direction  are  ignored. 

It  may  be  suggested  that,  in  view  of  the  number  of  small  and 
backward  establishments,  the  engineering  industry  would  to-day 
be  the  better  for  analogous  regulations. 


102    THE  WORKS  MANAGER  TO-DAY 

Rate.  Competition  among  cotton  mills  is,  as 
you  know,  of  the  keenest.  But  because  of  the 
inflexible  maintenance  of  the  Standard  Rate  and 
the  Normal  Day  in  all  factories  alike,  competition 
works  always  upwards,  towards  greater  efficiency, 
never  downwards,  in  a  lowering  of  standards. 
The  effect  of  fencing  off  the  downward  way  is 
to  constrain  all  efforts  of  management  and 
operatives  to  the  upward  way.  The  result  is — 
significantly  enough,  we  cannot  say  this  of  any 
British  industry  in  which  there  is  no  observance 
of  a  Standard  Rate  —  that  in  productive 
efficiency  the  Lancashire  cotton  mills  lead  the 
world.  It  is  hard  to  resist  the  inference  that 
there  is  here  a  lesson  to  be  learnt  by  the  engineer- 
ing and  other  industries,  if  their  able  managers 
will  but  deign  to  adapt  the  experience  of  other 
trades  to  their  own  peculiar  circumstances. 


VIII 
THE   "MANNERS"   OF   MANAGEMENT 

LET  us  return,  however,  to  the  practical  business 
and  immediate  difficulties  of  the  manager  of 
to-day.  I  may  remind  you  that,  just  as  it  is 
the  business  of  the  company  officers  of  an  army, 
not  only  to  follow  the  general  directions  of  the 
general,  but  also  to  raise  to  the  highest  point 
the  achievements  of  their  men,  so  it  is  a 
supremely  important  function  of  the  manager, 
in  his  execution  of  the  commands  of  his  superiors, 
to  develop  to  the  utmost  the  productive  efficiency 
of  his  staff.  This  is  a  function  of  ever-progress- 
ing complication,  needing  more  and  more  de- 
velopment of  managerial  technique.  The  future 
progress  of  the  professional  manager,  his  further 
evolution  out  of  the  mere  "  ganger,"  in  whom  he 
began,  to  the  scientific  industrial  administrator, 
is,  indeed,  bound  up  with  this  progressive  de- 
velopment of  technique — managerial  technique, 

103 


104    THE  WOKKS  MANAGER  TO-DAY 

not  mechanical.  The  management  must  keep 
pace,  not  only  with  the  growing  complication 
of  processes,  but  also  with  the  changing  status  of 
the  men.  For  a  long  time  in  the  history  of  the 
world  it  seemed  as  if  industrial  organisation — 
as  Darwin  observed  of  the  Fuegian — could  be 
achieved  only  with  slaves.  Right  down  to  half  a 
century  ago  it  could  be  imagined  by  thoughtful 
and  enlightened  men,  as  it  was  once  put  by  an 
American  apologist  for  negro  slavery,  that  the 
only  permanent  solution  of  the  Labour  Question 
in  all  countries  was  that  Capital  should  own 
Labour,  whether  white  or  black !  Clearly  this 
won't  do  nowadays.  Even  more  recent  is  the 
practice  of  treating  the  manual  worker  very 
much  as  we  treat  a  horse ;  expecting  from  it 
only  the  simplest  routine  acts,  giving  it  without 
explanation  peremptory  orders  (which  we  may 
be  wise  enough  to  utter  in  kindly  tones),  measur- 
ing the  food  and  warmth  and  other  amenities 
that  we  allow  it  to  enjoy  solely  by  what  we  think 
will  yield  in  our  service  the  maximum  efficiency, 
using  its  muscular  strength  entirely  as  suits  our 
convenience,  ignoring  any  possibility  of  its  having 
any  desires  of  its  own  as  to  the  way  it  should  go, 
and  calling  upon  it,  at  any  moment  and  at  what- 
ever intervals  wre  may  choose,  for  the  exercise, 
at  our  command  and  subject  only  to  the  extreme 


"MANNERS"  OF  MANAGEMENT     105 

limits  of  its  own  strength,  of  all  the  energy  of 
which  it  is  capable.  There  are,  of  course,  men 
who  are  humane  and  really  benevolent  towards 
their  horses ;  and  I  am  glad  to  think  that  there 
have  always  been  employers  who  have  been 
humane  and  really  benevolent  towards  their 
men.  But  so  long  as  workmen  could  be  treated 
like  horses  there  was  not  much  opportunity  for 
the  development  of  the  higher  qualities  of 
management.  The  foreman  who  could  swear 
in  the  dialect  of  his  gang,  and  knock  a  man 
down  if  he  did  not  promptly  obey,  was  the 
manager  produced  by  that  sort  of  relationship. 
We  often  find  it  made  a  matter  of  complaint 
that  "  workmen  are  not  what  they  were "  ;  and 
works  managers,  like  domestic  housekeepers, 
sometimes  sigh  for  what  Shakespeare  called  "  the 
constant  service  of  the  antique  world."  And 
there  is  this  much  ground  for  the  complaint  that, 
taking  a  long  view,  and  ignoring  particular  epi- 
sodes, it  is  fundamentally  the  workmen  as  a  class 
who  are  seeking  to  change  the  basic  conditions 
of  employment.  In  the  long  evolution  of  in- 
dustrial organisation,  from  the  basis  of  chattel 
slavery  to  that  of  feudal  serfdom,  and  from  that 
again  to  the  comparative  freedom  of  employment 
at  wages,  it  was  essentially  a  change  in  the  status 
of  the  manual  labourer  that  was  being  effected. 


106    THE  WORKS  MANAGER  TO-DAY 

During  the  past  hundred  years,  in  the  most 
advanced  industrial  communities,  the  status  of 
the  wage-earner  has  been  again  subtly  changing. 
This  is  the  underlying  secular  meaning  of  Trade 
Unionism,  Factory  Acts,  and  the  Democratic 
legislation  of  the  present  century.  In  the 
present  decade,  in  the  most  advanced  industries, 
this  incipient  change  of  status  has  become,  among 
the  workmen,  increasingly  a  matter  of  deliberate 
consciousness  and  purpose.  This  growing  self- 
consciousness  of  purpose,  and  desire  for  a  genuine 
improvement  in  status,  is  not,  in  itself,  usually 
made  a  ground  for  complaint  by  the  sensible 
manager :  he  very  often  sympathises  cordially 
with  it.  But  it  is  certainly  inconvenient  to  him 
that  neither  the  rank  and  file  of  the  workmen, 
nor  the  Trade  Union  committees,  can  usually 
give,  any  definite  or  logical  shape  to  the  specific 
changes  that  they  desire.  The  manager  naturally 
looks  to  Labour  to  solve  its  own  problems.  He 
himself  has  the  technical  side  of  the  industry 
to  manage,  if  not  also,  often,  the  buying  of  the 
materials  and  the  selling  of  the  product — to  say 
nothing  of  looking  sharply  after  the  competition 
of  all  his  rivals.  And  thus,  when  new  inventions 
involve  changes  in  processes,  when  changes  in 
processes  require  changes  in  the  methods  of 
remuneration,  and  when  changes  in  technique 


"MANNERS"  OF  MANAGEMENT     107 

permit  of  chaDges  in  the  grades  of  workers 
employed,  the  manager  feels  that  he  has  enough 
to  do  with  inventing  and  adopting  the  requisite 
innovations,  without  being  called  upon  also  to 
think  out  the  result  of  these  innovations  on  the 
future  of  this  or  that  set  of  operatives.  Un- 
fortunately, the  operatives  themselves  show  no 
sign  of  being  able  to  think  this  out,  or  to  devise 
methods  of  effecting  the  innovation  that,  without 
obstructing  improvement,  would  prevent  its  in- 
juriously affecting  the  workers'  Standard  of  Life. 
Thus  every  alteration  in  processes,  in  factory 
organisation,  or  in  methods  of  remuneration,  is 
apt  to  be  resented  and  resisted  ;  not  merely  from 
the  innate  industrial  Toryism  that  is  character- 
istic of  the  manual  worker,  but  also  from  an  in- 
articulate intuition  that  the  innovation — in  the 
particular  way  in  which  it  is  sought  to  be  intro- 
duced though  by  no  means  necessarily  in  itself 
— will  be  detrimental  to  the  narrow  interests 
of  the  operatives  concerned.  And  the  manager 
frequently  seeks  in  vain  for  an  explanation  of 
what  exactly  it  is  that  the  workmen  are  object- 
ing to,  or  what  precisely  it  is  that  they  them- 
selves would  propose,  as  the  method  of  effecting 
the  change  that  has  become  requisite. 

I  have  no  panacea  to  offer  for  Industrial  Un- 
rest.    The  changing  status  of  the  wage-earner 


108    THE  WORKS  MANAGER  TO-DAY 

necessarily  involves  a  further  retirement,  very 
gradually  and  possibly  even  slowly,  from  the 
position  of  autocracy  in  the  factory  which  the 
employer  has  inherited;  and  a  further  taking 
into  counsel,  and  even  into  partnership,  of  all 
the  wage-earners,  so  far  as  concerns  the  condi- 
tions of  their  working  life.  We  have  got  to 
remember  that  it  is  human  beings  like  ourselves 
with  whom  we  are  dealing,  husbands,  fathers,  and 
citizens  like  ourselves,  whose  services  are  rendered, 
exactly  like  our  own,  upon  a  basis  of  contract 
freely  entered  into  on  terms  of,  at  any  rate, 
nominal  equality.  We  can,  if  we  like,  still  take 
advantage  of  the  wage-earners'  poverty,  or  their 
ignorance,  to  bully  them,  to  subject  them  to 
caprice  or  tyranny,  or  to  insult  them  with  foul 
language  ;  but  we  do  so  at  our  peril.  Not  only 
are.  they  apt  to  revolt — how  many  of  the  minor 
stoppages  that  still  drag  down  the  productivity 
of  the  factory  or  the  mine  are  caused  by  some 
insolence  of  a  foreman — but,  as  the  manager  of 
genuine  professional  efficiency  well  knows,  it  is 
not  in  this  way  that  any  staff  can  be  stimulated 
to  its  maximum  productivity.  In  the  long  run 
the  British  workmen  of  to-day  will  only  do  their 
best  if  they  are  treated  not  as  slaves,  not  as 
serfs,  not  as  horses,  not  even  as  ignorant  savages, 
but  as  intelligent  human  beings,  having  equal 


"MANNERS"  OF  MANAGEMENT     109 

rights  to  life,  liberty,  and  the  pursuit  of  happi- 
ness, and  freely  and  willingly  co-operating  of 
their  own  accord  in  what  they  feel  to  be  a 
common  enterprise.1 

This  involves  more  than  mariners.  A  little 
while  ago  a  great  employer  suddenly  put  a  notice 
up  in  the  works  stating  that,  from  and  after  the 
following  Monday,  the  factory  dinner  interval 
would  begin  at  1  P.M.,  instead  of  at  noon.  The 
men  instantly  revolted,  and  insisted  on  leaving 
work  at  noon  as  they  had  been  accustomed  to  do. 

1  An  enormous  improvement  in  the  manners  of  management  would 
be  effected,  with  a  great  advance  in  that  amenity  of  the  workshop 
which  is  (though  we  often  forget  it)  indispensable  for  the  highest 
efficiency,  if  it  were  made  an  invariable  rule — except  where,  as  used 
to  be  frequently  the  case  in  Lancashire,  long  personal  acquaintance 
warrants  a  reciprocal  use  of  the  Christian  name,  as  between  equals — 
that  every  workman  were  addressed  as  Mr.  Blank,  and  every  work- 
woman as  Miss  or  Mrs.  Blank,  instead  of  by  the  surname  only.  The 
manager  should  insist  on  this  rule  being  obeyed  by  every  foreman. 
A  command  loses  none  of  its  force  by  being  conveyed  with  courtesy. 
To  treat  a  man  with  respect  is  the  only  way  to  secure  his  self-respect. 
Our  common  British  habit  of  varying  our  manners  according  to  what 
we  assume  to  be  the  social  status  of  the  person  with  whom  we  come 
in  contact  is  really  discourtesy,  if  not  gross  insolence.  In  Japan, 
where  there  is  only  one  code  of  manners,  the  employer  or  landlord  is  as 
elaborately  polite  to  the  coolie  labourer  or  peasant  cultivator  as  these 
are  to  him.  Herein  the  Japanese  are  our  superiors  in  civilisation. 

"There  is  a  factory  at  Glasgow  which  may  serve  as  an  example. 
When  a  workman  applies  at  the  door,  he  is  shown  into  a  waiting- 
room  furnished  like  the  waiting-room  of  an  ordinary  oince,  and  there 
the  foreman  comes  to  see  him.  He  is  interviewed  alone,  addressed 
as  Mr.  and  treated  as  a  self-respecting  member  of  Society.  The  way 
to  encourage  self-respect  in  a  man  is  to  show  him  respect  "  ("  The  Wel- 
fare of  Factory  Workers,"  by  A.  Shad  well,  Edinburgh  Review,  October 
1916). 


110    THE  WORKS  MANAGER  TO-DAY 

The  result  was  a  stoppage  lasting  several  days, 
to  the  considerable  pecuniary  loss  of  the  firm 
concerned.  I  believe  that  the  comment  among 
competent  professional  managers  was  that  it 
served  the  firm  right.  Possibly  the  principals 
themselves  had  interfered.  At  least,  one  cannot 
imagine  any  professional  manager,  with  any 
knowledge  and  experience  of  his  profession, 
making  such  a  blunder.  What  right  has  any 
employer,  whether  the  desired  change  was  good 
or  bad,  to  spring  a  peremptory  order  upon  his 
staff  in  a  matter  affecting  their  own  habits,  the 
arrangements  of  their  homes,  the  comfort  of 
their  wives,  the  health  of  their  children  ?  This 
was  to  treat  the  men  as  if  they  had  been  horses. 
No  wonder  there  was  a  stoppage  ! 

The  case  is  worth  pondering  over.  It  is,  of 
course,  necessary  that  every  large  enterprise 
should  be  highly  organised ;  and  that  in  order 
to  concentrate  the  energies  of  thousands  of  men 
to  a  given  end  and  purpose,  there  should  be 
unity  of  command  and  submission  to  the  common 
plan.  But  this  does  not  warrant  the  treatment 
of  human  beings  otherwise  than  with  considera- 
tion. Even  an  improvement  increasing  the 
men's  own  comfort  will  be  resented,  and  rightly 
resented,  unless  the  men  are  asked  to  consider 
the  proposal,  and  invited  to  consent  to  it.  And 


"MANNERS"  OF  MANAGEMENT     111 

even  in  indispensable  commands,  government 
does  not  necessitate  autocracy.  There  was  a  time 
when  no  one  knew  any  other  way  of  governing  a 
nation  than  by  the  commands  of  an  absolute 
monarch.  Gradually  it  was  discovered  that  to 
leave  it  to  any  one  man  to  command  as  he 
chose,  even  if  he  was  crowned  and  anointed,  did 
not  produce  the  most  efficient  government.  Men 
can  be  led  faster  and  further  than  they  can  be 
driven.  And  so,  in  the  course  of  the  last  century 
or  two,  kings  have  found  it  better  to  "  grant  a 
Constitution  "  to  their  subjects,  giving  them  an 
opportunity  to  discuss,  by  their  representatives, 
by  what  laws  they  will  be  ruled  and  how  they 
will  pay  their  taxes.  Many  old-fashioned  people 
doubted  whether  such  "Democracy"  would  not 
be  the  ruin  of  the  Kingdom.  It  was  found,  on 
the  contrary,  that  the  change  resulted,  not  only 
in  more  efficient  government  than  before,  but 
also  in  stronger  government,  and  in  ever  so  much 
more  obedience.  When  the  people  have  the 
"  consciousness  of  consent,"  they  are  much  more 
ready  to  comply  with  the  commands  that  have 
in  the  common  interest  to  be  given. 

In  recent  years,  not  a  few  far-sighted 
managers  of  large  and  nourishing  establish- 
ments, in  one  industry  after  another,  have  taken 
to  heart  this  lesson,  and  have  induced  the  em- 


112    THE  WORKS  MANAGER  TO-DAY 

ployers  to  "  grant  a  constitution  "  to  their  work- 
people. That  is  to  say,  it  has  been  agreed  that 
the  workpeople  shall  be  taken  into  counsel, 
through  their  appointed  representatives,  with 
regard  to  all  the  arrangements  of  the  factory 
that  affect  their  working  lives ;  and  especially 
before  any  change  in  these  arrangements  is  made. 
This  idea  of  a  constitution  for  the  factory  is  not 
altogether  a  novelty.  In  the  printing  trade  there 
has  always  existed — certainly  from  the  seven- 
teenth century — what  is  called  "  the  Chapel,"  a 
meeting  of  all  the  compositors  employed  by  one 
firm,  presided  over  by  the  "  Father  of  the 
Chapel,"  who  is  the  intermediary  between  the 
men  and  the  management.1  Woe  betide  the 
manager  who  makes  any  change  in  the  compos- 
ing room  without  first  communicating  it  to  the 
Father  of  the  Chapel,  and  giving  him  an  oppor- 
tunity of  laying  it  before  the  Chapel.  Many  a 
workshop  in  other  trades  has  long  had  its  in- 
formal "  shop  club,"  which  elects  its  foreman  or 
spokesman,  notably  with  regard  to  the  piecework 
rate  for  a  new  job.  The  Shop  Steward  in  each 
department  of  an  engineering  establishment  is  a 
somewhat  analogous  development. 

What  is  now  being   introduced  is  the  more 

1  History  of  Trade  Unionism,  by  S.  and  B.  Webb,  pp.  65-6  ;  In- 
dustrial Democracy,  by  the  same,  p.  299. 


"MANNERS"  OF  MANAGEMENT     113 

elaborate  Workshop  Committee.  This  should  be 
instituted,  on  the  suggestion  of  the  management, 
in  such  a  way  as  to  ensure  the  due  representa- 
tion of  each  department,  each  kind  of  work,  and 
each  grade  and  distinct  section  of  operatives. 
Unless  the  Workshop  Committee  is  really  repre- 
sentative of  the  feelings  and  desires  of  every 
corner  of  the  works,  it  will  not  function  to  the 
best  advantage.  Nor  will  it  work  well  if  it  is 
made  use  of  to  thwart  the  Trade  Union,  or  as  a 
rival  to  it,  or  if  it  is  allowed  to  deal  with  matters 
in  derogation  or  in  evasion  of  the  district  or 
national  agreements  between  the  Employers' 
Association  and  the  Trade  Unions.  It  may, 
indeed,  be  suggested,  in  order  to  prevent  any 
such  clashing,  or  any  suspicion  thereof,  both 
that  the  functions  of  the  Workshop  Committee 
should  be  carefully  defined  from  the  start,  and 
that  in  its  constitution  whatever  Trade  Unionism 
exists  in  the  establishment  should  be  definitely 
recognised.  It  might  be  well,  for  instance,  if 
the  suggestion  met  with  the  approval  of  the 
workmen  themselves,  that  the  members  of  the 
Trade  Unions  represented  in  the  establishment 
should,  as  such,  elect  altogether  half  the  members 
of  the  Works  Committee,  in  proportion  to  their 
several  numbers  ;  whilst  the  remaining  half  of 
the  members  should  be  elected  by  the  entire 


114    THE  WORKS  MANAGER  TO-DAY 

staff,  arranged  by  sections  or  grades,  irrespective 
of  whether  or  not  they  are  members  of  any  of 
the  Trade  Unions.  The  Workshop  Committee 
should  be  and  should,  remain  a  strictly  autono- 
mous and  distinct  body.  It  should  not  be  pre- 
sided over  by  the  employer  or  the  manager,  nor 
should  the  management  be  represented  on  it. 
There  must  be  no  proposition  that  the  firm 
should  pay  the  members  of  the  committee  for 
the  time  spent  upon  its  work — this  would  inevit- 
ably undermine  the  authority  of  the  committee, 
and  expose  its  members  to  the  suspicion  of  being 
"  employers'  men." l  They  must  feel  that  they 
are  the  guardians  of  the  workmen's  interests. 
The  management — preferably  including  all  the 
heads  of  departments  or  managers  of  sections — 
should  from  time  to  time  meet  the  Works  Com- 
mittee collectively,  whenever  either  side  has  any 
subject  on  which  a  conference  is  desired ;  and 
these  conferences  should  be  conducted  on  terms 
of  equality,  and  in  a  friendly  spirit,  in  order  to 
discover  some  way  by  which  the  desires  of  each 
side  can  be  conceded  without  injury  to  each 
other.  Such  subjects  as  the  cleanliness,  ventila- 
tion, lighting,  and  temperature  of  the  work-place 

1  There  need  be  no  objection  to  the  committee  meeting  on  the 
employer's  premises  —  the  management  should  proffer  a  suitably 
furnished  and  dignified  room  for  this  purpose,  just  as  if  it  were  a 
Directors'  meeting. 


"MANNERS"  OF  MANAGEMENT     115 

(upon  which  maximum  efficiency  depends  much 
more  than  managers  commonly  realise) ;  the  hours 
of  beginning  and  ending  work ;  the  intervals 
for  meals ;  the  dates  of  holidays ;  the  welfare 
arrangements,  including  especially  the  accom- 
modation for  meals ;  the  precautions  against 
accidents ;  the  benevolent  funds ;  the  workshop 
rules,  and  any  arrangements  about  fines,  deduc- 
tions for  breakages  or  inferior  work,  or  charges 
made  for  requisites  of  work,  or  for  hot  water, 
etc.,  together  with  any  alleged  infringements  of 
workshop  rules  or  district  agreements  as  to  wages 
or  hours,  might  all  be  considered  with  advantage 
by  such  a  Workshop  Committee,  and  brought  to 
the  notice  of  the  management  at  a  joint  confer- 
ence. Any  competent  manager  will  feel  it  a 
grave  blunder  for  an  innovation  of  any  sort  in 
any  of  these  matters  ever  to  be  promulgated  by 
the  management  until  it  has  been  explained  to 
the  Workshop  Committee,  and  its  opinion  there- 
on invited  and  considered.  Such  consultation 
may  seem  to  take  up  more  time  than  an  auto- 
cratic command,  and  to  involve  more  trouble. 
In  reality,  of  course,  as  all  experience  shows, 
such  a  consultation  invariably  saves  the  manage- 
ment, in  the  long  run,  a  great  deal  of  both  time 
and  trouble ;  and  often  saves  the  firm,  too,  no 
little  expense.  What  is  even  more  important, 


116    THE  WORKS  MANAGER  TO-DAY 

such  a  consultation,  which  not  infrequently  re- 
sults in  a  genuine  improvement  of  the  proposal, 
secures  for  it,  throughout  the  whole  establish- 
ment, the  invaluable  consciousness  of  consent, 
without  which  the  highest  efficiency  is  impossible. 


IX 
DISCIPLINE 

I  NOTICE  that  it  is,  to  say  the  least,  not  the 
most  competent  managers  who  are  the  quickest 
to  raise  the  objection  that  "  discipline  must  be 
maintained."  To  parody  a  well-known  epigram, 
I  am  inclined  to  believe  that,  in  this  imperfect 
world,  every  manager  gets  the  discipline  that 
he  deserves.  Anyhow,  one  thing  is  clear, 
namely,  that  the  manager  who  relies  for  dis- 
cipline on  autocratic  powers  of  punishment  will 
achieve  only  a  low  degree  of  industrial  efficiency. 
Punishment  of  any  sort,  whether  by  fine  or 
deduction,  by  reduction  to  a  lower  grade  of 
pay  or  by  temporary  suspension  from  work, 
inevitably  causes  in  itself  a  temporary  loss  of 
efficiency  in  the  woiker  punished  ;  and  it  is 
always  very  doubtful  how  far  this  is  made  up 
by  increasing  the  efficiency  of  the  staff  as  a 
whole.  It  would  certainly  be  an  ideal  arrange- 

117 


118    THE  WORKS  MANAGER  TO-DAY 

ment  if  a  factory  could  be  run  without  any 
other  punishment  than  dismissal,  on  the  under- 
standing that  every  worker  who  deserved  to  be 
kept  had  better  be  kept  in  the  best  possible 
temper.  Human  nature  being  as  it  is,  there  is 
more  to  be  done  by  attraction  than  by  pushing 
— more  by  emulation  and  encouragement  than 
by  driving  and  punishment. 

But  I  do  not  ignore  the  difficulties  of  this 
ideal,  nor  the  demands  that  it  makes  on  the 
skill  and  ingenuity,  as  well  as  on  the  temper 
and  tact,  of  the  manager.  Assuming  that  disci- 
plinary punishments  cannot  be  altogether  dis- 
pensed with,  how  should  they  be  managed  so 
as  to  conduce  to  the  utmost  productive  efficiency 
of  the  establishment — which  is,  significantly 
enough,  coincident  with  the  utmost  happiness 
and  contentment  of  the  operatives  concerned  ? 

First  of  all,  is  it  necessary  to  warn  you  that 
under  no  circumstances  must  the  firm  (or  any 
one  connected  with  it)  be  allowed  to  make  any 
pecuniary  gain  by  the  punishments.  Unless 
this  is  made  quite  clear  and  indisputable,  there 
will  be  no  conviction  of  impartiality  or  justice. 
If  there  are  fines,  it  is  eletnentary  to  say  that 
they  must  not  go  to  the  firm,  nor  to  pay  for 
anything  for  the  operatives  that  the  firm  ought 
to  pay  for.  What  I  am  sorry  to  say  is  still 


DISCIPLINE  119 

often  done  is  to  take  for  the  firm  the  sums 
levied  on  the  workers  for  defective  work — it 
may  be  for  mistakes  made,  or  for  omissions,  or 
for  bad  workmanship ;  it  may  be,  on  the  other 
hand,  for  mere  failures  in  the  process,  as  when 
pots  break  in  the  firing,  or  castings  are  spoilt 
in  the  mould.  The  firm  may  think  it  only 
just  that  it  should  get  what  it  can  in  partial 
recoupment  of  the  loss  of  material,  etc.,  and 
especially  of  breakages.  But  the  system  is  a 
bad  one  from  the  standpoint  of  efficiency. 
Every  deduction  creates  a  grievance.  It  is  not 
in  human  nature  not  to  resent  the  injustice  of 
having  to  suffer  for  what  is  often  (and  is  always 
believed  to  be)  an  unavoidable  accident.  And 
when  the  authority  which  arbitrarily  assesses 
the  deduction  itself  gains  by  making  it,  and 
by  making  it  heavy,  all  belief  in  fairness  and 
impartiality  necessarily  disappears.  The  resent- 
ment is  intense ;  and  the  reaction  in  slackening 
of  effort  is  incalculably  great.  From  the  stand- 
point of  the  management  the  system  is  a  blunder. 
The  firm  must  gain  absolutely  nothing  from  any 
fines  or  deductions  levied  on  the  operatives. 
The  amount  ought  to  be  disposed  of  annually, 
in  some  way  chosen  by  the  operatives  themselves, 
with  the  sanction  of  the  management,  so  that 
the  individuals  who  have  made  the  payments 


120    THE  WORKS  MANAGER  TO-DAY 

do  not  exceptionally  benefit — it  may  be  by  way 
of  subscription  to  a  local  hospital,  or  to  the 
benevolent  fund  for  distress  among  the  operatives 
not  met  by  other  provision  ;  or  even  for  an 
annual  entertainment — it  would  be  far  better 
if  it  were  a  week's  holiday — for  the  whole  staff. 

Every  manager  who  is  worth  his  salt  dislikes 
having  to  deal  with  discipline  cases,  but  hardly 
any  manager  yet  sees  his  way  to  free  himself 
from  an  invidious  duty.  What  ought  to  exist, 
in  every  large  establishment,  is  a  Discipline 
Board,  which  should  have  the  task  of  dealing 
with  all  failures  of  conduct,  from  bad  time- 
keeping up  to  gross  insubordination,  including 
all  breaches  of  discipline.  No  fines  or  reductions 
or  other  disciplinary  punishments  should  be 
inflicted  except  by  the  Board,  or  by  the  manager 
on  a  report  from  the  Board.  How  should  the 
Discipline  Board  be  composed  ?  It  may  seem 
a  daring  suggestion,  but  I  feel  sure  that  its 
members  should  be,  largely  if  not  entirely,  the 
operatives  themselves.  Every  Briton  believes 
that  he  has  a  right  to  be  tried  by  his  peers — 
that  is,  by  people  in  much  the  same  circum- 
stances as  himself;  even  the  House  of  Lords 
insists  on  this  right.  There  is  something 
particularly  invidious  in  the  management  being 
simultaneously  accuser,  judge,  jury,  and  execu- 


DISCIPLINE  121 

tioner.  A  Discipline  Board,  wholly  elected  by 
the  operatives  themselves,  or  one  made  up 
partly  of  departmental  officials  and  partly  of 
representative  operatives,  would  give  far  more 
general  confidence  than  the  autocratic  decision  of 
even  the  kindest  and  best-tempered  of  managers. 
And  the  operatives  must  not  be  chosen  by  the 
management  exclusively  from  among  the  leading 
hands,  or  top  grades,  but  must  come  from  all 
sections,  down  to  the  humblest.  It  is  a  good 
practice  to  add  to  the  Board,  for  particular 
cases,  one  or  two  members  of  the  same  grade 
as  the  operative  who  is  being  tried.  I  know 
one  large  firm  in  Scotland  where  all  the  cases 
of  bad  time-keeping  are  brought  before  a 
committee  elected  by  the  whole  staff,  which 
hears  excuses  and  inflicts  fines,  with  the  very 
interesting  result  that  the  number  of  cases 
promptly  fell,  and  the  aggregate  time  lost  was 
enormously  decreased.  Managers  troubled  by 
bad  time-keeping  might  take  this  hint. 


X 

FATIGUE  AND  ACCIDENTS 

ONE  of  the  best  aspects  of  that  progressive 
"  intellectualising  "  of  management  that  is  going 
on — we  are  already  a  long  way  away  from  the 
mere  ganger — is  the  amount  of  attention  that 
is  being  given  to  what  I  may  call  the  personal 
conditions  of  efficiency.  There  is  a  lot  to  be 
done  in  this  field,  in  all  sorts  of  odd  ways. 
I  suppose  that  all  professional  managers  now 
realise  that  any  working  room  which  seems 
"  stuffy "  when  you  enter  it  means  that  none 
of  the  workers  in  it  can  possibly  attain  their 
maximum  efficiency.  Their  fingers  are  accom- 
plishing fewer  operations  per  day  than  they 
might  do  with  even  less  fatigue.  It  is  of  no 
use  telling  me  that  the  workers  "  like  it  so " ; 
that  they  shut  all  windows  and  close  all 
ventilators,  and  so  on.  This  only  means  that 
the  management  has  not  put  in  brains  enough, 
122 


FATIGUE  AND  ACCIDENTS        123 

or  not  obtained  expert  advice  on  how  to  keep  the 
room  warm  and  comfortable  without  becoming 
"  stuffy  "  and  yet  without  draughts.  An  electric 
fan  will  sometimes  make  all  the  difference. 

Similar  attention  by  managers  is  required  to 
all  sanitary  conditions.  It  is,  of  course,  by  no 
means  enough  to  say  that  the  Factory  Acts,  and 
the  requirements  of  the  Local  Sanitary  Authority 
may  be  presumed  to  be  complied  with  (seeing 
that  the  firm  has  not  been  summoned  in  respect 
of  any  breach  thereof) ;  and  that  no  more  is 
required.  It  is  notorious  that,  even  in  Great 
Britain,  the  law  as  to  sanitation  in  factories  is 
very  imperfectly  enforced,  especially  as  regards 
establishments  or  workshops  employing  men 
only ;  and  that  the  official  inspection  is  still 
hopelessly  inadequate.  Moreover,  the  legal 
requirements  constitute  a  bare  minimum ;  and 
in  many  respects  they  still  fall  far  short  of  what 
is  necessary  for  that  fullest  industrial  efficiency  at 
which  the  competent  manager  always  aims.  I 
fear  that  we  all  know  factories  in  which,  in  this 
respect  or  that,  the  arrangements  for  ventilation, 
lighting,  cleanliness,  heating,  and  removal  of 
dust  and  dirt  are  such  as  absolutely  to  preclude 
a  maximum  of  efficiency.1  How  many  managers 

1  "  A  case  in  point  might  be  cited  that  is  typical  of  far  too  many  in 
this  country.     The  writer,  on  visiting  an  important  old  factory  in 


124   THE  WORKS  MANAGER  TO-DAY 

bear  in  mind,  when  going  through  their  works, 
that  "  noise,  worry,  flickering  lights,  inefficient 
lighting  or  light  reflected  from  bright  parts  of 
machinery  striking  the  eyes,  faulty  heating 
and  ventilation,  and  all  atmosphere  of  fussi- 
ness"  all  increase  fatigue,  and  thus  militate 
against  maximum  output  ?  The  factory  of 
the  future  will  be  as  noiseless,  as  regards  all 
running  of  machinery,  as  the  most  expensive 
motor-car. 

But  maximum  efficiency  is  dependent  on 
more  than  the  conditions  of  physical  health. 
For  instance,  need  the  workers  whom  one  sees 
standing  to  their  work  all  of  them  stand  ?  There 
seem  to  be  some  things  that  could  just  as  well 
be  done  sitting.  And  where  the  workers  sit, 
are  their  seats  of  exactly  the  height  and  shape 
to  minimise  their  fatigue  ?  I  have  seen  a  whole 
row  of  boys  provided  with  no  better  seats  than 

London  .  .  .  was  made  very  sad  by  seeing  a  poor  anamic-looking 
fellow  working  at  an  emery  buff  in  a  cellar-like  place,  in  which  the 
lighting  was  bad,  and  in  which  no  provision  was  made  for  the 
withdrawal  of  the  deadly  emery  and  brass  dust  thrown  off  from  the 
wheel ;  indeed,  there  was  practically  no  circulation  of  air.  Now 
this  was  not  a  case  of  a  grasping,  unfeeling  employer  conducting  his 
business  with  an  utter  disregard  for  the  well-being  of  his  employees, 
as  the  manager,  an  intelligent  and  able  man  (earning  £1500  a  year) 
is  thought  well  of  by  the  workers  ;  it  is  rather  a  case  of  ignorance  in 
such  matters,  and  want  of  imagination,  and  it  was  only  necessary  to 
call  his  attention  to  the  danger  to  receive  a  promise  that  it  would  be 
attended  to"  (Industrial  Fatigue  in  its  Relation  to  Maximum  Output, 
by  Henry  J.  Spooner,  C.E.,  1917,  p.  14). 


FATIGUE  AND  ACCIDENTS        125 

empty  packing-cases.  Naturally  their  output 
suffered.  It  is  clear  that  seats  must  be  adjusted 
to  the  height  of  individual  workers.  In  the 
composing  room  of  a  printing  works  there  will 
be  an  increase  of  output  if  each  compositor  finds 
the  "  case  "  adjusted  to  his  own  standing  height.1 
These  are  matters  that  every  manager  ought  to 
consider. 

The  workers  will  practically  never  ask  to 
be  made  more  comfortable  at  their  work.  They 
are  even  apt  to  resent  any  consideration  on  such 
points,  partly  from  a  subtle  sense  of  personal 
dignity,  partly  because  they  do  not  like  to  be 
dealt  with  as  if  they  were  machines,  which  work 
better  when  more  precisely  set  and  more  care- 
fully lubricated.  It  is  true  that  we  must  not 
look  upon  the  worker,  man  or  woman,  merely 
as  a  machine ;  but  we  ought  at  least  to  see  to 
it  that  he  or  she  is  treated  as  well  as  a  machine, 
in  the  sense  of  being  provided  with  all  the  con- 
ditions necessary,  on  the  one  hand  for  personal 

1  We  learn  from  the  Report  of  the  Chief  Inspector  of  Factories  for 
1914  that  the  women  employed  at  fish-curing  on  the  West  Coast  of 
Scotland  have  to  gut  the  fish  as  they  lie  in  the  "  farlanes  "  or 
troughs,  which  are  usually  flat  on  the  ground — thus  having  con- 
tinuously to  bend  their  backs  in  a  terribly  straining  manner,  causing 
actual  pain  to  them  when  they  stand  up.  It  had  apparently  not 
occurred  to  any  manager  that  their  daily  output  could  undoubtedly 
be  increased,  and  their  muscular  efforts  lessened,  by  adopting  a  more 
convenient  position  for  the  "farlanes,"  so  as  to  enable  the  women  to 
sit  at  their  work. 


126    THE  WORKS  MANAGER  TO-DAY 

comfort,  and  on  the  other  for  smoothest  running 
and  greatest  output. 

The  periods  of  labour,  which  are  largely  con- 
ventional, dating  from  a  time  when  industry 
was  carried  on  by  very  different  processes,  are 
at  present  demonstrably  not  those  which  yield 
the  greatest  efficiency.  A  spell  of  five  hours 
without  a  break,  and  without  some  stimulating 
food,  is  certainly  too  long  for  women  and  girls, 
and  probably  also  for  men.  Where  the  experi- 
ment has  been  tried,  of  serving  hot  cocoa  or 
milk,  and  insisting  on  a  ten  minutes'  pause,  there 
has  not  only  been  an  improvement  in  health, 
but  production  has  also  been  increased. 

I  wonder  when  British  managers  will  discover 
that  the  "  before  breakfast "  period  of  work  is 
the  least  profitable  of  all,  the  output  per  opera- 
tive during  this  hour  or  hour-and-a-half  falling 
habitually  to  no  more  than  80  or  90  per  cent 
of  the  output  in  the  middle  periods  of  the  day 
— a  shortage  due,  Professor  Kent  informs  us, 
to  a  "  loss  of  the  special  co-ordination  "  gained 
by  practice.1 

This  consideration  has  an  important  bearing 
on  the  length  of  the  working  day,  the  very 

1  First  and  Second  Reports  to  the  Home  Office  on  an  Investigation 
of  Industrial  Fatigue  by  Physiological  Methods,  by  A.  F.  Stanley 
Kent  (Cd.  8056  and  Cd.  8335,  1917). 


FATIGUE  AND  ACCIDENTS        127 

doubtful  advantage  of  extending  it  by  over- 
time, and  the  proved  disadvantage  of  losing  a 
Sunday  rest.  After  ages  will  wonder  at  the 
stupidity  of  the  British  War  Office,  when  the 
urgent  pressure  came  for  additional  war  material 
in  1914-15,  in  desiring,  and  at  the  weakness 
of  the  employers  in  allowing,  the  lengthening 
of  the  working  day  and  the  adoption  of  con- 
tinuous seven-day  shifts,  under  the  delusion 
that  this  was  the  way  to  increase  the  total 
output.1  I  am  glad  to  think  that  "  in  the 
main  it  was  not  the  works'  managers  who  were 
responsible  for  the  large  amount  of  overtime 
and  Sunday  labour"  in  [1915-17]  .  .  .  "in 
fact  they  know  that  in  a  certain  proportion  of 
cases  a  substantial  increase  in  the  actual  total 
output  can  be  secured  by  a  reduction  in  the 
working  hours." 2  But  that  reduction  has  not 
yet  been  made.  As  a  mere  question  of  maximum 

1  "During  the  early  part  of  the  war,  owing  to  the  great  pressure 
of  work,  our  industrial  establishment,  employing  some  15,000  hands, 
never  shut  down  except  for  a  few  days  ;  that  is,  excepting  one  or 
two  holidays,  we  ran  clean  through  for  eighteen  months  without  a 
stop  from  Monday  morning  until  Sunday  night ;  but  it  did  not  pay. 
For  the  last  few  months,  and  with  the  permission  of  the  Ministry 
of  Munitions,  we  have  knocked  off  Sunday  work,  the  result  being  that 
our  output  has  been  equally  as  great "  (Sir  Robert  Hadfield's  Preface 
to  Industrial  Fatigue  in  its  Relation  to  Maximum  Output,  by  Henry 
J.  Spooner,  1917). 

2  Industrial  Fatigue   in   its   Relation   to   Maximum   Output,    by 
Henry  J.  Spooner,  1917,  p.  17. 


128    THE  WORKS  MANAGER  TO-DAY 

industrial  efficiency,  we  ought  certainly  to  adopt, 
as  the  normal  working  period  in  all  manu- 
facturing industry,  for  men  as  for  women,  the 
Eight  Hours'  Day,  with  a  single  break  in  the 
middle,  which  several  dozen  of  the  most  success- 
ful establishments  in  different  industries  have 
found  greatly  to  lessen  the  time  lost  by  sickness 
and  actually  to  increase  their  aggregate  output 
for  the  year.  It  is  very  suggestive  to  find  that 
nearly  every  shortening  of  the  working  week, 
even  down  to  42  hours,  has  been  accompanied 
after  a  short  time,  not  by  a  diminution  but  by 
an  actual  increase  of  output.  Lord  Leverhulme 
is  actually  beginning  to  talk  of  a  Six  Hours' 
Day  at  Port  Sunlight — which  may  be  the  way 
to  get  the  workmen  to  consent  to  two  shifts. 
There  is  room  for  careful  experiment  here,  yet 
the  impulse  of  every  employer,  as  I  am  afraid 
it  is  that  of  most  managers,  is  to  attempt  to 
meet  any  demand  for  increased  output  by 
lengthening  the  working  hours,  piling  up  over- 
time, even  putting  on  Sunday  shifts. 

And  what  are  we  going  to  do  about  the  quite 
appalling  toll  of  accidents  which  goes  on  un- 
diminished,  and  even  increases.  I  speak  here 
quite  as  much  of  what  we  call  minor  accidents, 
which  cause  only  pain,  as  of  those  which  cause 
maiming  or  death.  But  it  is  not  creditable  to 


FATIGUE  AND  ACCIDENTS        129 

us  as  a  nation — it  is  certainly  not  creditable 
to  managers  as  a  class — that  the  industrial 
casualties  of  the  United  Kingdom  in  peace — 
casualties  serious  enough  to  involve  absence 
from  work,  and  liability  for  compensation — 
should,  year  by  year,  actually  exceed  in  number 
the  casualties  of  all  our  armies  and  navies  in  a 
great  war.  It  is  a  short-sighted  view — it  may 
be  that  of  the  counting-house — that  it  costs  less 
to  pay  compensation  for  accidents  than  to 
prevent  them.  You  may  be  quite  sure  that 
the  workmen  will  not  long  allow  us  thus  to 
"  coin  their  blood  for  drachmas."  What  is 
perhaps  more  relevant  to  my  present  theme 
is  the  fact — which  I  do  not  find  is  always  re- 
membered— that  every  accident  means,  directly 
and  indirectly,  a  quite  perceptible  diminution 
of  productivity,  not  merely  in  respect  of  the 
death  or  injury  of  the  worker  affected,  nor 
merely  in  the  interruption  of  the  work  thereby 
caused,  but  also  in  the  psychological  effect  of 
the  untoward  event  on  the  rest  of  the  staff. 
The  laying  of  the  pit  idle  for  a  day,  when 
there  has  been  a  serious  colliery  accident,  brings 
this  loss  of  efficiency  before  us  in  a  tangible 
form.  The  manager  who  lets  accidents  continue 
to  occur  when  they  can  by  any  means  be  pre- 
vented is  failing  in  his  job.  It  is  not  very 


130    THE  WORKS  MANAGER  TO-DAY 

nice  to  reflect  that,  in  several  industries,  we 
can  see  that,  year  in  and  year  out,  the  accidents 
happen  to  a  disproportionate  extent  at  par- 
ticular hours  in  the  day,  and  on  particular  days 
in  the  week.  What  is  the  cause  of  this,  and 
why  is  it  not  stopped  ?  It  looks  as  if  a  more 
general  study  of  Fatigue  would  yield  a  return 
not  only  in  happiness  but  also  in  increased 
efficiency.  It  is  demonstrable,  too,  that  accidents 
occur  with  greater  frequency  on  dark  days  than 
on  light,  merely  "  because  of  insufficient  artificial 
light.  Improper  lighting  conditions  result  in 
much  spoiled  work  .  .  .  and  an  enormous 
number  of  casualties." l  These  casualties  ought 
to  lie  on  the  conscience  of  the  manager  ! 

1  Practical  Safety  Methods  and  Devices,  by  George  Alvin  Cowee, 
1916,  p.  381. 


XI 

"SCIENTIFIC   MANAGEMENT"   AND 
"WELFARE   WORK" 

WE  often  hear,  nowadays,  of  what  is  called  "Scien- 
tific Management,"  by  which  some  American 
"  Efficiency  Engineers "  claim  to  work  marvels. 
The  matter  is  well  worth  study  by  every  British 
professional  manager — he  cannot  fail  to  pick  up 
hints  that  will  be  useful  to  him.  But  I  am 
afraid  that  a  lot  of  rubbish  has  been  talked 
under  cover  of  the  phrase  "  Scientific  Manage- 
ment." I  am  told  by  those  who  have  visited  a 
great  many  American  works  in  different  industries 
that  some  of  those  that  profess  the  most,  in  the 
way  of  "  Scientific  Management,"  have  really 
achieved  nothing  at  all  superior  to  what  we  have 
done  quietly  in  our  own  way  over  here ;  and 
that  some  of  those  which  appear  to  have  achieved 
more  in  the  way  of  output  find  that  they  do  so 
at  a  disproportionate  increase  of  standing  charges. 

131 


132    THE  WORKS  MANAGER  TO-DAY 

You  see,  it  is  quite  possible  for  an  "  Efficiency 
Engineer,"  in  getting  rid  of  some  existing  drag 
on  production,  to  introduce  a  new  and  expensive 
form  of  waste ! 

I  will  make  here  only  three  comments   on 
Scientific  Management.1 

1 "  Fundamentally,  Scientific  Management  consists  (1)  of  an 
improved  system  of  piecework  remuneration,  with  rates  'scientifically' 
fixed  upon  a  minute  and  prolonged  '  time-study '  of  each  operation 
and  'therefore  '  [it  is  alleged]  incapable  of  alteration  to  the  detriment 
of  the  workmen  whom  it  may  have  tempted  to  enlarged  output ;  (2) 
of  the  utmost  possible  standardisation  of  tools,  equipment,  operations, 
and  products,  so  as  to  permit  of  maximum  production  ;  (3)  of  elabor- 
ate '  motion  study,'  so  as  to  discover  how  exactly  the  workman  should 
use  his  muscular  force,  with  what  intervals,  and  for  what  length  of 
time,  in  order  to  produce  the  greatest  result;  (4)  of  'routing  and 
scheduling,'  and  directing  by  'instruction  cards'  not  only  every 
movement  of  material,  tools,  components,  and  products  within  the 
factory  walls,  but  also  every  movement  of  every  workman  to  the 
same  end;  and  (5)  of  the  adoption  of  'functional  foremanship,' 
replacing  the  old-time  single  foreman  by  half-a-dozen  specialised 
directors  and  instructors — the  '  gang  boss,'  the  '  speed  boss,'  the 
'  repair  boss,'  the  '  route  clerk,'  the  '  instruction  card  clerk,"  the  '  time 
and  cost  clerk,'  the  'shop  disciplinarian,'  and  the  'general  inspector  ' " 
(The  New  Statesman,  June  17,  1916).  It  is  not,  of  course,  any 
solution  of  the  problem  of  what  piecework  rates  to  fix,  or  what 
'  bonus  times  '  to  allow  for  any  particular  jobs  ;  nor  yet  of  how  the 
Standard  Rate  should  be  arrived  at. 

Those  who  wish  to  study  'Scientific  Management'  should  read 
first  the  works  of  its  enthusiastic  inventor,  F.  W.  Taylor  (Principles 
of  Scientific  Management  and  Shop  Management) ;  and  should  then 
study  Hoxie's  careful  analysis  of  the  results  in  American  practice 
(Scientific  Management  and  Labour,  1915).  After  that  they  can 
study  the  various  books  in  which  Harrington  Emerson,  H.  L.  Gantt, 
F.  B.  Gilbreth,  and  other  American  'Efficiency  Engineers'  have 
elaborated  their  various  '  systems.'  A  good  account  of  the  history  of 
the  movement  is  afforded  by  Scientific  Management :  a  History  and 
a  Criticism,  by  Horace  B.  Drury  (Columbia  University  Series,  1915). 


"SCIENTIFIC  MANAGEMENT"      133 

Its  best  feature  lies  in  its  psychological  in- 
fluence on  the  management  itself  in  its  insistence 
on  the  perfect  organisation  of  the  factory,  use  of 
the  best  machinery,  consideration  of  the  condi- 
tions of  the  greatest  efficiency  for  each  worker, 
prevention  of  any  loss  of  time,  and  prompt  appli- 
cation of  labour-saving  appliances.  All  this 
means  only  more  intelligence  and  more  imagina- 
tion in  our  managers  and  employers,  together 
with  production  on  the  most  economical  scale, 
with  larger  factories  and  a  great  effort  towards 
standardisation,  and  the  deliberate  regularising 
of  demand.  It  emphasises  the  importance  of 
(a)  discovering,  and  (b)  applying  universally  the 
best  process  and  the  best  way  of  doing  each  job, 
instead  of  letting  each  little  establishment,  and 
even  each  workman,  blunder  along  on  "  rule  of 
thumb."  It  may  teach  our  managers  and 
employers  a  great  deal  as  to  the  economy  of  (a) 
short  and  regular  hours ;  (6)  properly  arranged 
intervals  for  rest  and  refreshment ;  (c)  ascertain- 
ing precisely  the  most  suitable  tools  for  each 
job  and  each  man  (much  more  can  be  shovelled 
if  the  spade  is  exactly  the  right  shape  for  the 
material,  and  the  right  length  for  the  man  who 
wields  it).  All  these  are  lessons  for  the  manager. 
There  is  an  almost  endless  field  for  improvement 
here.  There  are  factories  which  still  employ 


134    THE  WORKS  MANAGER  TO-DAY 

men  in  dragging  things  about,  which  ought  to 
be  moving  by  mechanical  traction.  The  use  of 
tools  specially  designed  and  adapted  for  particular 
jobs  is  still  exceptional. 

And  lest  I  should  be  supposed  to  be  imagining 
these  shortcomings  in  British  engineering  in- 
dustry, let  me  fortify  my  criticism  by  that  of  an 
indisputable  authority,  the  President  of  the 
Institution  of  Mechanical  Engineers  (Mr.  Michael 
Longridge),  speaking  no  longer  ago  than  April 
1917.  "Except  in  a  few  cases,"  he  declared, 
"workshop  organisation  here  has  not  received 
the  attention  given  it  in  America  or  Germany. 
There  are  still  shops  without  definite  planning 
of  the  progress  of  the  work,  without  adequate 
equipment  of  jigs  and  gauges,  and  without 
standard  shapes  of  tools  or  a  tool-room ;  where 
men  drift  about  in  search  of  tools  or  tackle,  or 
wait  in  idleness  for  drawings  and  materials ; 
where  machinery  is  obsolete  and  light  so  bad 
that  good  work  cannot  be  done  if  the  machinery 
were  up  to  date.  Such  shops  must  go.  They 
cannot  compete  in  price  or  quality  of  work  with 
those  in  which  what  is  known  as  '  Scientific 
Management,'  or  anything  approaching  it,  pre- 
vails ;  where  the  progress  of  every  job  is  planned 
to  the  last  detail  before  it  is  sent  into  the  works; 
where  machinery  is  so  arranged  that  each  piece 


"  SCIENTIFIC  MANAGEMENT  "      135 

passes  through  the  whole  series  of  operations  to 
be  performed  on  its  pre-determined  order  and 
without  pause,  and  is  immediately  succeeded  by 
another  piece  to  undergo  the  same  cycle  of 
operations  ;  where  labourers  and  tackle  for  fixing 
the  work  are  ready  the  moment  they  are  wanted; 
where  drawings, gauges,  and  tools  properly  ground 
to  standard  shapes  come  with  the  work ;  where 
cleanliness,  light,  and  comfort  reign,  and  where 
endeavour  is  made  to  get  the  workman  to  regard 
his  task  more  as  a  problem  to  be  solved  than  a 
task  to  be  got  through."  l 

Would  you  like  to  see  how  this  factory  in- 
efficiency strikes  the  intelligent  workman  ?  I 
don't  think  we  quite  realise  how  much  genuine 
contempt  the  thinking  workmen  sometimes  have 
for  the  way  we  do  our  business  !  They  are  very 
often  far  from  admiring  the  "  efficiency "  with 
which  they  are  "  managed."  I  commend  to 
you  a  very  interesting  book,  incidentally  de- 
scribing the  organisation  of  what  (if  this 
description  is  at  all  accurate)  I  would  fain  hope 
to  be  the  worst  of  all  the  great  engineering 
establishments  of  the  United  Kingdom.  That 
book,  Life  in  a  Railway  Factory,  by  Alfred 
Williams,  gives  an  appalling  description  of  the 

1  Presidential  Address  to  the  Institution  of  Mechanical  Engineers, 
April  20,  1917. 


136    THE  WORKS  MANAGER  TO-DAY 

waste  and  disorganisation  in  the  great  railway 
engineering  works  at  Swindon.  Ask  yourself 
whether  this  or  that  defect  cited  by  Mr.  Long- 
ridge,  or  stigmatised  by  Mr.  Williams,  does  not 
exist  to-day — doubtless  in  a  lesser  degree — in 
the  works  with  which  you  are  concerned. 

My  second  comment  is  that  the  "  study  of 
the  job" — the  accurate  investigation  of  all  the 
actual  processes — is  all  to  the  good  (though  it 
will  task  the  brains  of  themanager  to  the  utmost !), 
in  so  far  as  it  has  for  its  motive  and  object  either 
the  discovery  of  how  waste  of  time  or  waste  of 
effort  can  be  prevented,  or  of  how  to  arrive  at 
a  more  precise  calculation  of  bonus  times  or 
piecework  prices.  But  if  it  is  used  either  as  an 
instrument  of  making  the  operative  work  harder 
or  more  incessantly,  or  for  an  insidious  lowering 
of  rates  or  earnings,  it  will  lead  to  revolt,  and 
produce  such  a  spread  of  "  ca'  canny,"  and  such 
a  sullen  resistance,  as  will  make  the  factory  lose 
in  efficiency,  at  a  blow,  more  than  it  can  possibly 
gain  by  any  technical  improvement.  What  shall 
it  profit  a  manager  to  discover  how  a  workman 
can  be  made  to  increase  his  output,  if  he  thereby 
"puts  the  back  up "  of  the  great  mass  of  work- 
men, and  of  the  Trade  Union  in  which  they  have 
faith  ?  Remember  always  that  the  workmen  are 
not  horses.  If  once  they  believe  you  are  playing 


"  SCIENTIFIC  MANAGEMENT  "      137 

tricks  with  them,  you  are — from  the  standpoint 
of  maximising  productive  efficiency — undone. 

My  last  comment  is  that  you  must  not 
dream  of  taking  a  single  step  in  the  direction 
of  Scientific  Management  until  it  has  been  very 
elaborately  explained  to,  and  discussed  by,  not 
only  the  particular  men  with  whom  you  are  going 
to  experiment,  but  also  by  the  whole  workshop. 
It  will,  if  you  handle  it  with  any  competence, 
be  a  matter  of  intense  interest  to  them.  You 
must  talk  to  them  both  publicly  and  privately, 
with  magic  -  lantern  slides  and  experimental 
demonstrations,  answering  endless  questions,  and 
patiently  meeting  what  seem  to  you  frivolous 
objections.  The  Workshop  Committee  or  the 
Shop  Stewards  will  naturally  be  the  first  people 
to  be  consulted.  Remember,  it  is  the  men's 
working  lives  (not  your  own  life)  that  you  are 
proposing  to  alter,  and  their  craft  (not  yours) 
that  you  may  seem  to  be  going  to  destroy.  You 
will  be  making  a  ruinous  blunder,  fatal  to  the 
maximum  efficiency  of  the  works,  if  you  content 
yourself  with  bribing,  by  high  rates,  bonuses,  or 
rewards,  just  the  few  individual  men  whom  you 
propose  to  put  on  the  new  system,  whilst  leaving 
the  opinion  of  the  rest  of  the  staff  sullenly 
adverse.  The  others  will  not  be  appeased  merely 
by  the  fact  that  a  few  selected  men  are  making 


138    THE  WORKS  MANAGER  TO-DAY 

"  good  money"!  And  you  must,  of  course,  make 
it  clear  in  some  way,  to  your  own  men  as  well  as 
to  the  Trade  Union  concerned,  that  what  you  are 
proposing  to  introduce  will  not  merely  pay  the 
first  lot  of  selected  workmen,  and  not  merely  the 
present  generation,  but  also  will  have  a  good 
influence  on  the  prospects  of  the  whole  staff,  and 
will  not  have  any  adverse  effect  on  the  Standard 
Rate,  now  or  hereafter.  Unless  you  can  demon- 
strate this — unless  you  in  some  way  automatically 
protect  the  piecework  rates  from  being  "  cut " 
at  some  future  time — possibly  by  some  future 
manager — you  will  be  met  (and  in  the  national 
interest  you  ought  to  be  met)  with  unrelenting 
opposition ;  and,  if  you  impose  the  change  by 
force  or  by  individual  bribery,  you  will  inevitably 
encounter  the  reprisals  of  "ca'  canny." 

One  particular  form  of  "  Scientific  Manage- 
ment," as  we  have  seen,  is  to  take  care  that 
every  operative  is  in  a  position  to  render, 
continuously,  his  or  her  services  in  the  most 
efficient  manner.  To  do  this  involves  perfect 
physical  health,  an  untroubled  mind,  and  a 
cheerful  disposition.  The  wise  works  manager, 
in  the  United  States  even  earlier  and  more 
extensively  than  in  the  United  Kingdom,  has 
necessarily  realised  that  the  establishment  was 
as  much  interested  in  the  health  and  well-being 


"WELFARE  WORK"  139 

of  its  operatives  as  they  were  themselves.  The 
result  is  that,  in  the  course  of  the  last  few  years 
a  new  duty  has  been  placed  upon  the  manage- 
ment, under  the  name  of  "  Welfare  Work," 
namely,  the  supervision  of  the  health  and 
comfort  of  the  operatives,  inside  the  factory 
and  outside ;  and  the  organisation  and  pro- 
vision of  all  sorts  of  things  for  their  conveni- 
ence. This  is  partly  philanthropy,  or  rather 
common  humanity ;  and  partly — we  had  better 
be  candid  about  it — a  way  of  increasing  in- 
dustrial efficiency.  Those  benevolent  and  far- 
sighted  firms,  such  as  the  Cadburys,  Rowntrees, 
Levers,  and  others  less  in  the  public  eye,  who 
have,  in  Great  Britain,  pioneered  in  Welfare 
Work  of  different  kinds,  have  found  their  ex- 
penditure well  repaid,  not  merely  in  their 
satisfaction  at  the  benefit  to  their  operatives, 
but  also,  even  unexpectedly,  in  the  increased 
productiveness  of  their  establishments. 

In  the  United  States,  where  "Welfare  Work" 
has  been  much  more  widely  adopted  than  in  the 
United  Kingdom,  and  where  it  has  been  pushed 
to  a  far  greater  height,  in  literally  hundreds  of 
establishments,  great  and  small,  in  every  con- 
ceivable industry,  the  results  achieved  have 
been  even  more  remarkable.  Every  works 
manager  ought  to  realise  that  it  has  been 


140    THE  WORKS  MANAGER  TO-DAY 

demonstrated  beyond  dispute,  that  in  a  factory 
where  the  workers  are  properly  looked  after, 
even  at  some  considerable  expense,  there  is 
less  time  lost  by  ill -health;  the  average 
output  is  less  pulled  down  by  weakness  and 
fatigue;  the  "labour  turnover"  is  reduced  to 
a  minimum  because  nobody  wants  to  leave ; 
the  quality  of  the  workers  steadily  rises  as  the 
increased  power  of  selection  among  the  crowd 
of  candidates  begins  to  tell ;  and,  more  im- 
portant than  all,  those  "imponderables"  that 
we  call  morale,  character,  esprit  de  corps  or 
what  not,  bring  influences  to  bear  on  produc- 
tivity that  could  not  possibly  have  been  pre- 
dicted. 

These  results  of  Welfare  Work  have  been, 
so  far,  mainly  demonstrated  in  the  United 
Kingdom  among  women  and  girls.  They  are 
now  being  experienced  in  those  establishments 
in  which  similar  arrangements  have  been  made 
for  boys.  It  is  by  no  means  easy  to  organise 
anything  analogous  with  regard  to  men  ;  though 
the  very  popular  canteen  arrangements  made 
during  the  war  point  the  way  to  further  de- 
velopments. There  are  already  (July  1917) 
more  than  600  salaried  Welfare  Supervisors 
installed  in  British  manufacturing  establish- 
ments. The  Home  Office,  by  virtue  of  a  clause 


"WELFARE  WORK"  141 

silently  smuggled  through  Parliament  in  1916, 
has  made  Welfare  Work  part  of  its  requirements 
under  the  Factory  Acts,  primarily  for  women 
and  boys  ;  and  no  professional  manager  can  afford 
to  ignore  what  will  presently  be  an  indispensable 
branch  of  works  administration. 

I  do  not  propose  to  discuss  here  the  various 
branches  of  Welfare  Work,  nor  the  particular 
devices  that  have  been  found  successful.  The 
books  on  the  subject  that  will  now  abound  must 
be  read  and  compared.1  What  it  concerns 
managers  to  bear  in  mind  is  that  "  Welfare 
Work"  is  already  bitterly  resented  among  certain 
strata  of  the  operatives ;  and  that  it  all  depends 
on  the  spirit  and  the  purpose  for  which  it  is 
carried  out  whether  it  may  not  presently  develop 

1  See  Welfare  Work,  by  E.  Dorothea  Proud  (1915)  ;  Experi- 
ments in  Industrial  Organisation,  by  Edward  Cadbury  (1912)  ; 
Welfare  Study,  what  it  is,  by  Cecil  Walton  (Maclure  and  Macdonald, 
Glasgow,  1917,  24  pp.)  ;  together  with  the  score  of  Reports  published 
during  1915-17  by  the  Health  of  Munition  Workers  Committee. 
Instructive  accounts  of  the  American  experience  will  be  found  in 
such  works  as  Social  Engineering,  by  W.  H.  Tolman,  and  Safety, 
by  W.  H.  Tolman  and  L.  B.  Kendall ;  Citizens  in  Industry,  by 
0.  R.  Henderson  ;  "  Employers'  AVelfare  Institutions,"  by  George  A. 
Stevens  and  L.  W.  Hatch,  in  the  1903  Report  of  the  Commissioner 
of  Labor  for  New  York  State-,  "Employers'  Welfare  Work,"  by 
Elizabeth  L.  Otey,  in  Bulletin  No.  123  of  the  U.S.  Bureau  of 
Labor,  1913  ;  The  Henry  Ford  Book :  Help  the  other  Fellow,  by 
Henry  Ford,  1915  ;  chapter  xv.  of  The  Administration  of  Industrial 
Enterprises,  by  Edward  D.  Jones,  1917  ;  New  Ideals  in  Business:  an 
Account  of  their  Practice  and  their  Effects  upon  Men  and  Profits,  by 
Ira  D.  Tarbell. 


142    THE  WOKKS  MANAGER  TO-DAY 

into  a  new  cause  of  industrial  friction,  which 
might  easily  become  so  detrimental  to  maximum 
efficiency  as  to  outweigh  all  the  gain  to  be  made 
by  the  improvement  in  the  workers'  health. 

I  do  not  know  how  I  can  better  make  you 
realise  the  depth  and  the  heat  of  the  feeling 
that  is  being  aroused  than  by  quoting  at  length 
the  Report,  which  you  are  not  likely  otherwise 
to  see,  of  a  recent  meeting  of  women  factory 
operatives  of  various  localities  and  different 
industries.  It  behoves  managers  to  realise  what 
it  is  that  is  resented. 


WOMEN  DISCUSS   "WELFARE" 

At  a  Conference  of  representative  women,  held  on 
Saturday,  May  5,  1917,  some  very  strong  statements 
were  made  with  regard  to  Welfare  Work,  and  the  super- 
vision of  women  in  munition  works. 

Miss  Mary  MacArthur  declared  "that  there  is  no 
word  in  the  English  language  more  hated  amongst  the 
women  workers  of  to-day  than  that  of  'Welfare.'"  The 
chief  objection  they  have  to  recent  developments  is  that 
they  find  it  difficult  to  understand  the  position  of  the 
welfare  worker  who  tells  them  she  is  looking  after  then- 
interests,  but  yet  they  know  that  she  is  paid  by  the 
employer.  Necessarily  all  seek  real  welfare  for  them- 
selves, but  the  workers  do  not  feel  that  this  is  secured  by 
the  interference  of  the  employers'  representatives.  It  is 
for  the  welfare  of  human  beings  that  they  should  be 


"WELFARE  WORK"  143 

independent  and  be  able  to  combine  with  their  fellows, 
but  most  welfare  workers  discourage  organisation,  and 
only  try  to  increase  output.  Besides,  welfare  workers 
often  interfere  outside  factory  hours,  and  such  interfer- 
ence with  home  life,  leisure,  and  liberty  undermines  the 
workers'  independence  and  self-reliance,  and  tends  to 
make  them  forget  that  it  is  more  important  to  be  a  good 
citizen  than  a  good  machinist.  The  workers  have  a  right 
to  the  best  conditions  obtainable.  Trade  Unions  are 
necessary  to  claim  and  maintain  these  conditions,  and, 
having  secured  them  and  acting  in  combination,  the 
workers  can  look  after  much  for  themselves  which  the 
welfare  workers  undertake  to  do. 

It  was  stated  that  girls  object  to  even  a  good  welfare 
supervisor,  because  they  think  her  goodness  will  not 
last,  and  they  wonder  what  the  game  is.  Instances  of 
complaints  made  to  welfare  supervisors  were  given, 
many  being  of  a  most  trivial  nature,  and  all  being 
individual  complaints  for  the  benefit  of  the  individual, 
no  attempt  being  made  to  improve  the  general  well- 
being,  nor  was  there  any  encouragement  given  to  mutual 
action.  A  good  supervisor  tries  to  do  everything  for 
the  girls,  and  they  do  nothing  for  themselves  or  each 
other,  and  she  discourages  organisation.  The  bad  super- 
visor disciplines  and  is  always  interfering.  She  interferes 
if  the  girls  are  out  at  night  (especially  if  they  are  with 
a  man  in  khaki),  she  interferes  if  boots  are  dirty,  or 
blouses  low  at  the  neck,  or  stockings  thin.  But  she 
hardly  interferes  as  thoroughly  as  it  is  done  in  America, 
where  the  welfare  supervisors  fill  up  charts  with  particulars 
about  the  parents,  religion,  taste  in  books,  etc.,  etc.  In 
America  this  scheme  is  part  of  scientific  management, 
where  the  essence  of  scientific  management  is  centralisation 


144  THE  WORKS  MANAGER  TODAY 

of  authority  and  the  subordination  of  the  workers,  and 
the  employers  take  the  view  that  when  the  workers 
become  independent  the  welfare  supervisor  gives  them 
back  their  authority.  It  is  this  unwarrantable  interfer- 
ence on  the  part  of  the  employers  or  their  representatives 
that  is  objected  to,  not  to  what  welfare  workers  do  in 
looking  after  food,  rest  rooms,  sanitation,  etc.  In  New 
York  the  welfare  supervisor  has  been  long  hated  because 
she  is  paid  by  the  employer,  and  she  cannot  serve  two 
masters  ;  and  the  position  is  becoming  the  same  here. 
Really  good  Avelfare  workers  can  rarely  continue  in  their 
position.  An  enthusiastic  welfare  worker  tried  to  get 
young  girls  off  heavy  machines,  and  protested  against 
having  the  rates  cut,  but  her  job  had  to  be  given  up, 
because  supervisors  are  not  expected  to  use  their  influ- 
ence in  this  direction.  A  manager  or  superintendent 
is  accepted  by  the  girls  as  being  for  the  boss,  and  being 
so  recognised  all  is  fair  and  square  ;  but  if  a  supervisor 
is  said  to  be  for  the  good  of  the  girls,  they  are  at  once 
suspicious  of  her.  Instances  were  given  of  places  in 
America  and  in  this  country  where  there  are  no  welfare 
supervisors,  but  good  conditions  are  secured  by  Com- 
mittees of  Trade  Union  women  looking  after  the  shops, 
and  if  anything  is  wrong  they  see  that  it  is  put  right. 
These  workers  are  left  free,  so  there  is  no  more  need 
to  supervise  the  workers  than  for  the  workers  to  supervise 
the  employers  ;  but  where  welfare  work  exists  some  girls 
have  said,  "We  have  to  fight  welfare  for  all  we  are 
worth." 

Another  speaker  emphasised  the  need  for  women  to 
supervise  the  work  of  women.  Frequently  the  whole 
control  is  in  the  hands  of  men,  and  it  is  most  important 
to  have  women  to  refer  to  about  girls'  health,  etc. ;  but 


"WELFARE  WORK"  145 

this  need  not  mean  welfare  supervisors,  but  forewomen 
or  women  superintendents,  as  they  would  understand 
the  workers  and  the  work  of  the  workshop,  and  would 
be  more  satisfactory.  It  was  at  one  time  suggested  that 
a  supervisor  should  qualify  by  working  in  a  factory ;  but 
in  appointing  supervisors  social  influence  is  the  most 
important  factor,  university  degrees  are  also  often 
demanded,  and  the  result  is  that  many  supervisors 
understand  neither  the  work  nor  the  workers. 

It  is  scandalous  that  women  without  practical  experience 
should  have  such  positions  (some  think  it  is  enough  to  have 
had  experience  managing  domestic  servants),  and  in  this 
way  the  whole  system  of  welfare  supervision  is  discredited. 
If  run  by  the  State  it  might  be  satisfactory,  if  on  the 
same  lines  as  factory  inspections;  but  probably  it  would 
be  best  managed  by  Trade  Unions.  There  was  plenty  of 
evidence  that  the  girls  think  it  is  really  a  dodge  to  get 
more  out  of  them,  and  there  is  no  doubt  that  w  elf  are 
pays.  For  instance,  an  employer  thought  of  increasing 
wages  to  retain  the  services  of  his  employes,  but  instead 
gave  them  cocoa  and  a  bun  in  the  middle  of  the  morning, 
and  the  output  was  greatly  increased  at  a  trifling  expense. 

It  is  all  right  to  try  and  get  a  big  output  on  the 
employers'  side,  but  there  is  no  need  for  hypocrisy  and 
interference.  The  workers  are  right  in  trying  to  get 
all  possible  chances  for  human  interest  and  a  full  life,  and 
perhaps  there  is  no  need  for  the  mistrust  of  employers — 
mistrust  which  prevents  any  good  relations  between  welfare 
supervisors  and  workwomen.  It  was  suggested  that  at 
the  present  time  there  is  a  place  for  welfare  workers, 
but  the  best  welfare  supervisor  should  try  and  make 
herself  unnecessary.  At  present  girls  are  frequently 
hardly  ready  to  take  charge  of  their  own  interests, 

L 


146    THE  WORKS  MANAGER  TO-DAT 

and  need  help  and  training  to  do  so,  though  instances  were 

given  where  girls  are  promoted  from  the  bench  and  make 

most  satisfactory  forewomen.      From  this  discussion  and 

that  on  the  other  resolutions  (factory  inspection,  housing 

of  the  workers,  and  the  health  of  the  younger  employes), 

it  was  evident  that  many  working  women  and  girls  are  keen 

on  managing  their  own  concerns.     The  right  Trade  Union 

instinct  is  working,  and  they  will  soon  be  in  line  with  the 

most  advanced  men,  if  not  able  to  give  them  a  bit  of  a  lead. 

The  following  Eesolution  was  put  and  carried  : — 

"  That  this  Committee  declares  its  conviction  that  the 

establishment  of  a  system  of  welfare  workers  in  the 

service  of  employers  can  never  materially  increase 

the  wellbeing  of  the  workers  as  a  whole ;  and  that 

while  it  advocates  the  employment  of  women  to 

supervise  the  work  of  women,  it  does  not  consider 

that  such  supervisors  should  be  regarded  as  having 

any  other  functions  than  those  of  management. 

"  It  protests  against  any  extension  of  control  over  the 

private  lives  of  the  workers,  and  asserts  that  in 

every  factory  the  welfare,  social  and  physical,  of 

the  workers  is  best  looked  after  by  the  workers 

themselves. 

"  With  this  object  in  view  this  Conference  urges  that 
in  every  workshop  and  factory  there  should  be 
a  Trades  Union  Committee,  not  only  to  look  after 
wages  and  similar  conditions,  but  to  interest  itself 
in  all  the  concerns  of  the  workers  under  their 
direction  and  to  make  representations  thereupon, 
when  necessary,  to  the  management." 1 

1  Journal  of  the  Confederation  of  Iron  and  Steel  Workers,  June 
1917.  Criticism  to  a  similar  effect  will  be  found  in  The  Trade 
Union  Worker  for  the  same  mouth. 


"WELFARE  WORK"  147 

Now,  analysing  these  complaints,  we  see  that 
the  Welfare  Supervisor,  being  the  salaried 
officer  of  the  employer,  has  to  overcome  the 
very  natural  suspicion  that  (a)  he  or  she  will 
discourage  Trade  Union  membership ;  (6)  inter- 
fere with  the  freedom  of  the  operatives'  private 
lives ;  (c)  diminish  their  sense  of  independence 
and  self-reliance ;  (d)  act  as  a  spy  and  an 
informer  for  the  employer;  and  (e)  help  him 
to  concede  "welfare,"  not  in  addition  to  but 
instead  of  an  increase  of  wages.  It  is  perhaps 
not  uncharitable  to  suggest  that  the  greater  part 
of  this  series  of  grievances  centres  round  Trade 
Unionism.  Like  a  Workshop  Committee,  Wel- 
fare Work  will  fail,  and  do  more  harm  than 
good,  if  it  is  made  use  of  as  an  alternative  to 
Trade  Unionism  ;  or  as  a  means  of  preventing  or 
discouraging  in  the  factory  Trade  Union  member- 
ship. But  the  Welfare  Supervisor  who  has  any 
such  idea,  and  the  manager  or  employer  who 
has  any  such  purpose,  may  as  well  give  up  any 
attempt  either  at  successful  Welfare  Work  or 
at  maximising  industrial  efficiency.  The  ad- 
vantages of  Trade  Unionism  for  women  are  so 
manifest  and  so  undoubted  ;  the  gain  in  their 
productive  efficiency  brought  about  by  successful 
Trade  Union  organisation  is  so  marked  ;  and  the 
drawbacks  of  the  feeble  ineffectiveness  and  lack 


148    THE  WORKS  MANAGER  TO-DAY 

of  gumption  that  usually  characterise  the  un- 
organised women  workers  have  been  so  often 
commented  on,  that  the  first  thing  that  any 
competent  manager  aiming  at  the  highest 
industrial  efficiency  should  do  with  a  staff  of 
female  operatives  is  undoubtedly  to  persuade 
them  to  join  a  Trade  Union.  The  Welfare 
Supervisor  is,  of  course,  not  warranted  in 
actually  pressing  them  to  join  a  Trade  Union ; 
but  she  should  unquestionably  take  every  oppor- 
tunity of  pointing  out  to  them  the  advantages 
— alike  to  them  and  to  the  firm — of  their 
belonging  to  a  Trade  Union.  Why,  the  very 
argument  for  increased  production  is  that  the 
enlarged  profits  that  it  will  yield  will  be  accom- 
panied by  increased  wages,  which  are  typified  to 
the  women  workers  in  Trade  Unionism.  Unless 
the  manager  and  the  Welfare  Supervisor  make 
the  women  realise  that  their  increased  efficiency 
is  to  benefit,  not  the  firm  alone,  but  also  the 
operatives,  and  that  in  higher  wages  as  well  as 
in  greater  amenity  of  life,  the  very  object  of  the 
Welfare  Work  will  be  thwarted  from  the  start. 
The  Welfare  Supervisor  must  undoubtedly  give 
it  out  in  all  possible  ways  that,  with  the 
authority  of  the  management,  she  is  there  to 
encourage  and  foster  Trade  Union  membership 
among  the  staff,  as  the  first  step  to  any  increase 


"WELFARE  WORK"  149 

in  its  productive  efficiency.  For  the  same  reason 
as  in  the  case  of  the  men,  the  women  should  be 
urged  to  have  their  own  independent  Workshop 
Committee  (on  which  the  Welfare  Supervisor 
had  better  not  sit),  which  should  take  its  part 
in  the  administration  of  the  workers'  common 
concerns ;  and  should,  of  course,  be  consulted 
by  the  Welfare  Supervisor  before  any  innova- 
tion is  introduced  in  the  workshop  arrangements. 
A  tactful  Welfare  Supervisor  who  avowedly 
encourages  Trade  Union  membership,  does  not 
presume  or  pretend  herself  to  represent  the 
workers,  and  makes  all  possible  use  of  the 
elected  Workshop  Committee,  will  find  the  pre- 
judices against  Welfare  Work  rapidly  disappear. 
Such  a  lady  will  realise  that  the  women  rightly 
regard  her  as  the  employers'  representative  ;  and 
she  will  know  how  to  avoid  anything  in  the  way 
of  undue  interference  with  the  women's  private 
lives ;  or  the  imposition  upon  them  of  any 
arbitrary  standard  of  conduct,  dress,  or  manners. 
It  is  in  the  personal  influence  gained  over  each 
woman  individually  that  good  is  done  in  any  of 
these  matters. 

The  Welfare  Supervisor  may,  however,  find 
it  not  quite  easy  in  some  establishments  to 
keep  the  balance  even  between  her  duty  to 
her  employer,  who  is  apt  to  be  primarily  con- 


150    THE  WORKS  MANAGER  TO-DAY 

cerned  with  increasing  profits,  and  her  natural 
sympathy  with  the  women  workers'  claims  to 
better  remuneration.  The  Welfare  Supervisor 
must  look  after  the  interests  of  the  employer,  or 
he  will  not  keep  her ;  and  she  must  genuinely 
promote  the  interests  of  the  women  whose 
welfare  she  is  there  to  secure,  or  they  will  not 
be  influenced  by  her.  Is  this  an  insoluble 
dilemma?  Many  employers,  on  the  one  hand, 
and  nearly  all  wage-earners,  on  the  other,  would 
say  that  it  was.  I  do  not  think  so.  I  am 
perhaps  simple  enough  to  believe  what  we  are 
so  often  assured — what,  indeed,  is  the  final 
justification  alike  of  the  Trade  Union  Standard 
Rate  and  of  the  employers'  Scientific  Manage- 
ment— that  the  increase  in  industrial  efficiency 
which  it  is  possible  to  obtain  by  Welfare  Work 
and  other  improvements  in  factory  organisation, 
will  genuinely  pay  both  employers  and  employed. 
I  believe,  further,  as  I  have  already  explained  to 
you  in  connection  with  Payment  by  Results, 
that  only  on  condition  of  making  this  increase  in 
efficiency  directly  pay  the  wage-earners  can  the 
employer,  in  the  long  run,  make  it  pay  himself. 
In  this  matter  of  Welfare  Work,  at  any  rate,  the 
interests  of  both  parties  are  identical ;  both 
stand  to  gain  by  an  improvement  in  the  workers' 
health  and  comfort ;  and  neither  party  can 


"WELFARE  WORK"  151 

achieve  the  end  without  the  co-operation  of  the 
other.  The  Welfare  Supervisor  ought  to  decline 
to  have  any  part  in  any  new  arrangement  which 
does  not  promote  the  better  health  or  greater 
comfort  of  the  operatives.  She  is  appointed  in 
order  to  increase  the  productive  efficiency  of  the 
establishment  and  therefore  its  profits  ;  but  only 
in  ways  which  increase  the  health  and  well-being 
of  the  operatives.  Other  devices  do  not  fall 
within  her  sphere.  If  the  management  tries 
to  use  the  Welfare  Supervisor  for  these  other 
profit-making  devices — for  changes  which  do 
not  increase  the  health  and  well-being  of  the 
operatives — this  will  prove  as  suicidal  as  cutting 
the  rates.  The  Welfare  Supervisor  who  lends 
herself  to  such  tactics  will  find  that  she  thereby 
destroys  her  power  of  effecting  those  other 
profitable  improvements  for  which  she  was 
engaged. 

These  difficulties  and  complications  of  Welfare 
Work  make  it  desirable  that  no  Welfare  Super- 
visor should  be  appointed  because  of  her  relation- 
ship to  a  member  of  the  firm,  or  because  she 
has  a  "  commanding  manner  and  is  a  good 
disciplinarian,"  or  because  she  has  "  taken  a  great 
interest  in  philanthropic  work."  The  post 
demands  a  special  training,  not  only  in  the 
duties  of  a  Welfare  Supervisor,  but  also  in  what 


152    THE  WORKS  MANAGER  TO-DAY 

are  now  called  "  Social  Studies,"  preparatory  to 
"  Social  Work "  of  various  kinds.  At  least  a 
year  of  such  training  should  be  insisted  on, 
together  with  some  practical  experience  of  factory 
life  and  of  the  habits  and  feelings  of  the  manual 
workers.  Such  courses  of  training,  including 
opportunities  for  gaining  the  practical  experience 
required,  are  now  provided  by  the  University  of 
London  (Ratan  Tata  Department  of  Social  Science 
at  the  London  School  of  Economics,  Clare  Market, 
Kingsway,  W.C.),  and  by  some  of  the  provincial 
universities.  An  untrained  and  inexperienced 
Welfare  Supervisor  may  easily  be  worse  than 
none  at  all.  She  may,  without  realising  it, 
easily  upset  the  minds  and  tempers  of  the 
operative  staff  to  such  an  extent  as  to  cause  a 
positive  drop  in  the  output. 


XII 

ON  "CHOOSING  EQUALITY" 

AND  now,  although  I  have  very  far  from  covered 
the  whole  ground,  I  must  bring  this  sermon  to 
an  end.  I  do  not  pretend  that,  even  when  the 
manager  has  done  his  utmost,  including  all  that 
I  have  here  suggested  and  a  great  deal  more, 
he  will  have  been  able  to  remove  all  the  causes 
of  industrial  inefficiency,  or  that  he  can  pride 
himself  on  achieving  the  maximum  output.  It 
is  human  nature  that  he  is  dealing  with,  and, 
as  we  are  often  told,  it  is  human  nature  that 
is  the  trouble.  Only  I  don't  think  the  funda- 
mental trouble  with  human  nature  is  where 
it  is  often  placed.  We  shall  never  get  the 
maximum  production  out  of  our  industrial 
establishments  so  long  as  these  are  run,  and 
are  known  by  the  operatives  to  be  run — not 
for  the  benefit  of  the  persons  who  do  the  work, 
not  even  for  the  benefit  of  the  community  as  a 

153 


154    THE  WORKS  MANAGER  TO-DAY 

whole — but  for  the  benefit  of  a  class  of  function- 
less  landlords  and  shareholders  to  whom  we  have, 
by  the  laws  that  we  have  made  and  by  the 
social  system  that  we  maintain,  chosen  to  give 
the  privilege  of  levying  a  tribute  on  our  labour 
equal  in  the  aggregate,  in  the  United  Kingdom 
and  in  the  United  States,  to  something  like 
one- third  of  the  produce.1  This  the  community 
can  stop  whenever  it  chooses  to  do  so.  Political 

1  Specious  calculations  are  sometimes  made  to  show  that  the 
amount  of  what  is  technically  known  as  "  Surplus  Value,"  or,  as  we 
commonly  say  in  the  United  Kingdom  or  the  United  States,  the 
amount  drawn  as  rent  and  interest  by  the  functionless  landowners 
and  shareholders,  is  nothing  like  so  much  as  one-third  of  the  whole 
product  of  industry.  Thus,  it  is  sometimes  sought  to  he  proved  that 
the  whole  net  profit  of  the  coal-mining  industry,  or  the  engineering 
industry,  or  the  cotton  industry,  or  of  some  particular  concern,  would 
not  suffice  to  increase  the  wages  of  all  the  workmen  employed  therein 
by  more  than  one  or  two  shillings  per  week.  These  calculations  are 
fallacious,  and  the  wage-earners  know  it.  The  manager  would  do 
well  not  to  argue  with  his  workmen  on  this  basis.  It  may  well  be 
that,  in  any  particular  concern  or  industry,  after  deducting  rents 
and  royalties,  debenture  and  mortgage  interest,  and  all  the  salaries 
allowed  to  the  managing  partners  or  directors  for  their  work,  the  net 
profits  divided  as  dividends  among  the  ordinary  shareholders,  in 
any  particular  year,  would  not,  even  if  wholly  devoted  to  an  iucrease 
of  wages,  effect  nearly  so  great  an  augmentation  as  might  at  first 
sight  be  expected.  But  what  the  workmen  as  a  whole  are  concerned 
with — like  the  political  economist — is  the  entire  share  drawn  by  the 
owners  of  land  and  capital  as  such,  irrespective  of  any  contemporary 
participation  by  them  in  industry  ;  and  not  the  terms  on  which  any 
particular  concern  may  have  hired  its  land  or  obtained  its  capital. 
It  was  not  the  directors  and  managers,  but  "the  possessors  of  the 
instruments  of  industry "  that  John  Stuart  Mill,  more  than  half  a 
century  ago,  reproached  for  "the  enormous  share"  that  we  choose 
to  enable  them  to  abstract  from  the  product  of  our  labour  by  hand 
or  brain. 


ON  "CHOOSING  EQUALITY"      155 

economy  teaches  us  that  it  can  be  done,  and 
how  it  can  be  done.  "Profiteering" — held  up 
to  obloquy  by  Prime  Ministers,  and  condemned 
by  enlightened  public  opinion  as  a  social  crime, 
and  aptly  defined  as  "  taking  out  of  an  industrial 
enterprise  anything  beyond  a  fair  remuneration 
for  personal  services  actually  rendered  " — is  now 
seen  by  the  economists  to  be,  because  of  the  bad 
psychological  reactions  that  it  creates,  in  the 
long  run,  incompatible  with  maximum  production 
— paradoxically  enough,  even  with  an  aggregate 
maximum  of  profit!  But  I  must  go  further. 
It  is  not  only  the  tribute  that  idleness  is  thus 
enabled  to  levy  upon  industry  which,  in  the 
last  analysis,  now  hampers  so  intolerably  our 
national  production.  We  shall  not  manage — 
human  nature  being  as  it  is  —  to  get  the 
maximum  production  possible,  until  we  are  wise 
enough,  and  well-mannered  enough,  in  the  words 
of  Menander,  to  "  Choose  Equality."  We  must 
somehow  procure — and  this  is  a  more  difficult 
process  than  merely  expropriating  the  function- 
less  landlords  and  shareholders — a  much  more 
equal  distribution  of  the  produce  among  those 
who  do  co-operate  in  its  creation  by  hand  or 
by  brain.  So  long  as  we  persist  in  keeping 
three-fifths  of  the  producers  no  better  than 
horses  (and  many  of  them  far  worse  than  horses) 


156    THE  WORKS  MANAGER  TO-DAY 

whilst  ten  or  twenty  thousand  "  captains  of 
industry "  insist  on  claiming  for  their  really 
indispensable  services,  out  of  the  common  pro- 
duct, each  of  them  perhaps  fifty  or  a  hundred 
times  as  much  as  the  craftsman's  standard 
rate,  there  will  be  (as  of  course  there  ought 
to  be)  industrial  unrest.  What  Society  has 
to  secure  for  each  man,  whether  manager  or 
manual  worker,  is  an  income  sufficient  to  allow 
of  the  subsistence  of  himself  under  conditions 
of  maximum  personal  efficiency  in  respect  of 
the  powers  he  possesses  and  of  the  function 
assigned  to  him,  together  with  the  means  of 
maintaining  his  wife  and  of  bringing  up  his 
children  in  such  a  way  that  they  can  make  the 
best  of  their  own  powers ;  and,  further,  full 
security  for  the  future.  Beyond  these  quite 
liberal  terms,  it  is  difficult  to  make  out  any 
claim  on  grounds  of  the  maximum  social 
efficiency.  I  am  not  now  suggesting  that  we 
could  or  should  compel  managers  to  accept  the 
present  wages  of  the  craftsman ;  nor  do  I  wish 
to  threaten  all  inventors  with  getting  no  greater 
a  reward  than  Faraday  received.  Faraday 
voluntarily  "  chose  equality."  It  is,  on  the 
whole,  only  by  their  own  deliberate  choice  that 
the  exceptionally  able  men  will  be  rewarded 
otherwise  than  they  are  now ;  and  it  will  be 


ON  "CHOOSING  EQUALITY"       157 

interesting  to  see  how  many  of  them  will,  in  this 
matter,  prefer  voluntarily  to  imitate  Faraday ; 
and  to  seek  their  reward  in  a  life  of  fascinating 
interest  in  the  exercise  of  faculty,  and  in  the 
consciousness  of  service  rendered,  rather  than 
in  accumulating  riches  for  themselves  and  their 
descendants.  But  these  speculations  take  us 
too  far  afield.  I  end  as  I  began,  by  emphasis- 
ing the  fact  that,  under  any  social  order,  from 
now  to  Utopia,  management  is  indispensable 
and  all- enduring. 


INDEX 


Accidents,  122-130 

Actuaries,  Institute  of,  7 

Address,  method  of,  109 

Agreements  with  Trade  Unions, 
37-39  ;  as  to  Scientific  Manage- 
ment, 137-8  ;  as  to  hours  of 
labour,  109-110  ;  as  to  Wel- 
fare Work,  146-9  ;  as  to  double 
shifts,  128;  as  to  Workshop 
Committee,  113-114 

American  practice  in  "hiring 
and  firing,"  23,  33  ;  in  in- 
quiries into  character,  23  ;  in 
dismissals,  33;  in  rate-cutting, 
68,  70,  75  ;  in  Scientific 
Management,  131  -  2  ;  in 
workshop  organisation,  134  ; 
in  Welfare  Work,  138-152; 
as  to  Surplus  Value,  154 

Appointments,  20-25  ;  patronage 
in,  23-25  ;  inquiry  into  char- 
acter for,  22-23  ;  of  Welfare 
Supervisors,  145,  151 

Architects,  Royal  Institute  of 
British,  7 

Atkinson,  Henry,  59,  79,  84,  86 

Autocracy  discredited,  111 

Barnes,  Rt.  Hon.  G.  N.,  62 
Barr  and  Stroud  System,  58,  62 
Beveridge,  W.  H.,  22 
Bonus  systems.     See  Payment  by 
Results 


Boot  and  shoe  manufacture,  the, 

57,  82,  87 

Bootmakers,  the  hand,  52 
Brassworkers,  82,  89 
Breakfast,  work  before,  126 
Bruce,  A.  B.,  69 
Building    trades,    the,    58,    87, 

93 

<<Ca'  canny,"  18,  19,  76-79,  85, 

86,  90,  138 
Cadbury  Brothers,   Limited,   91, 

139 

Cadbury,  Edward,  91,  141 
Casual  labour,  20-21 
"Chapel,"  the,  82,  112 
Check weighman,  the,  66,  81 
"Choosing  Equality,"  On,  153-7 
Coalmining,  66,  81,  88-89,  129 
Collective  Agreements,  39,  41-44, 

100-102 
Collective     Bargaining,      35-39, 

41-44,    62,    63,    77,    80,    87, 

91,  94,  100-102 
Colliery    Managers,     Association 

of,  3 

Comfort  in  work,  122-130 
' '  Constitution  "  for  the  Factory, 

a,  111-116 
Cost     of     labour     distinguished 

from  rate  of  wages,  53 
Cost  of  production,  reducing  the, 

15-20 


159 


160    THE  WORKS  MANAGER  TO-DAY 


Cotton  industry,  the,  42,  65,  82, 

87,  88,  93,  100-102 
Co  wee,  G.  A.,  130 

Davies,  W.  J.,  82,  89 

Deductions,  117-121 

Denny,  W.,  69,  71 

Diemer,  H.,  2 

Discipline,  28-33,  117-121 

Discipline  Board,  a,  120-121 

Dismissals,  27-33  ;  by  foremen, 
28-33  ;  appeal  against,  30-32  ; 
notice  of,  32-33  ;  diminished 
by  Welfare  Work,  140 

Drury,  Horace  B.,  132 

Duncan,  J.  C.,  2 

Efficiency,  9-14,  138,  155 
"Efficiency  Engineer,"  the,   59, 

60,  61,  86,  132 
Emerson,  Harrington,  59,  132 
Employment  Department,  20 
Employment  Managers,  2 
Engineer,  The,  59 
Engineering,  the  industry  of,  27, 

81,  92,  97,  101 
Ennis,  W.  D.,  2 
Equality,  on  choosing,  153-7 

Fabian  Society,  36,  83 

Factorv  organisation,  bibliography 
of,  1 

Faraday,  156-7 

"Father  of  the  Chapel,"  82,  112 

Fatigue,  122-130 

Fines,  117-121 

Fish -curing,  125 

Ford,  Henry,  141 

Foremen,  appointments  by,  21  ; 
bribery  of,  24  ;  the  manners 
of,  27  ;  tyranny  of,  27-29  ; 
dismissal  by,  28-33  ;  appeal 
against,  30-32  ;  women  as, 
144-5 

Gantt,  H.  L.,  59,  132 

Gas  Engineers,  Institute  of,  3 


Gilbreth,  F.  B.,  132 
Going,  Charles  B.,  2 
Group  bonus,  90-91 
Group  piecework,  90-91 

Hadfield,  Sir  Kobert,  127 
Halsey  System,  58,  59,  68 
Hatch,  L.  W.,  141 
Health    of    Munition    Workers' 

Committee,  141 
Henderson,  C.  K.,  141 
"  Hiring  and  Firing,"  23 
Hours  of  Labour,  54  ;  not  to  be 

increased,    100,    102  ;    not  to 

be  arbitrarily  varied,  109-110  ; 

ought  to  be  reduced,  126-128  ; 

to  a  Six  Hours'  Day,  128 
Hoxie,  132 
Button,  W.  S.,  2 

Individual  Bargaining,  63 
Investigators,  82 

Jobbery,  24 

Jones,  Edward  D.,  2,  78,  97, 
141 

Kendall,  L.  B.,  141 
Kent,  A.  F.  Stanley,  126 
Kimball,  D.  S.,  2 

Labour,   causes  of  trouble  with, 
37-40.       See    Trade     Unions, 
Standard  Rate,    Rate- cutting 
Welfare  Work 
Laurence,  Edward,  85 
Leverhulme,  Lord,  128,  139 
Lighting,  evils  of  bad,  130 
London  School  of  Economics,  152 
Longridge,  Michael,  73,  93,  135 
"  Lump  of  Labour  Fallacy,"  58 

Macarthur,  Mary,  142 

Management,  the  function  of, 
2-14  ;  profession  of,  2  ;  biblio- 
graphy of,  1  ;  indispensable 
to  efficiency,  4  ;  likely  to  be- 


INDEX 


161 


come  more  necessary,  8  ; 
"  manners  "  of,  103-116,  per- 
manence of,  157 

Medical  Council,  the  General,  19 

Menander,  155 

Mill,  J.  S.,  52,  154 

Mount  Ebal,  19 

Munitions  of  War  Acts,  95-96 

Munitions,  Ministry  of,  39,  46, 
77 

"Mutuality,"  63 

Otey,  Elizabeth  L.,  141 

Papermakers,  the  hand,  52 

Payment  by  Results,  55-98.  See 
Rate-cutting 

Pease,  Edward  R.,  83 

Piecework,  56-98;  in  the  building 
trades,  61  ;  in  the  engineer- 
ing industry,  61-68  ;  in  the 
printing  trade,  57  ;  in  boot 
and  shoe  manufacture,  57  ; 
in  the  cotton  trade,  42,  57, 
65,  82,  87,  88,  93,  100-102; 
in  glass -making,  57  ;  in  coal- 
mining, 57,  66,  81,  88-89, 129  ; 
in  steel-smelting,  57  ;  in  lace- 
making,  57  ;  in  cigar-making, 
57  ;  in  wood- working  trades, 
61  ;  actually  preferred  by 
workmen,  57  ;  why  often  ob- 
jected to,  62-71 

Piecework  Lists,  63,  65,  87-88 

Premium  Bonus  systems.  See 
Payment  by  Results 

Printing  industry,  the,  57,  82, 
112,  125 

"Profiteering,"  155 

Profit-sharing,  objections  to,  83 

Proud,  E.  Dorothea,  141 

Punishment,  unwisdom  of,  117- 
121 

Purchasing  Department,  3 

Ratan  Tata  Department  of  Uni- 
versity of  London,  152 


Rate-cutting,  67-98,  144 

Rate-fixer,  the,  62-68 

Restoration  of  Trade  Union  Con- 
ditions, 55-56,  94-98 

Reward  systems.  See  Payment  by 
Results 

Richmond,  J.  R.,  82 

Roland,  H.,  2 

Rowan  System,  58,  59 

Rowntree  &  Sons,  139 

Sales  Manager,  3 

Sanitation,  122-130 

Scientific  Management,   56,  130- 

152  ;  bibliography  of,  132 
Shadwell,  A.,  109 
Shaw  Company,  the  A.  W.,  1 
Shop  Steward,  the,  63,  81-82 
Six  Hours'  Day,  the,  128 
Skulking,  97 

Spooner,  Henry  J.,  124,  127 
Standard   Rate,   the,    17-20,   41- 

54  ;  alleged  need  for  reduction 

of,  49-52 

Stevens,  G.  A.,  141 
"  Study  of  the  job,"  the,  136 
Sunday,  unprofitableness  of  work 

on,  127 

Surplus  Value,  amount  of,  154 
Sweated  trades,  the,  45-46 
Swindon  Works,  136 

Tarbell,  Ira  D.,  141 

Taylor,  F.  W.,  59,  132 

Time-keeping,  bad,  68,  121 

Tolman,  W.  H.,  141 

Trade  Boards  Act,  99 

Trade  Unions,  recognition  of, 
34-40  ;  prevalence  of,  34  ; 
advantages  of,  35-36  ;  biblio- 
graphy of,  36  ;  bargaining 
with,  37-40  ;  multiplicity  and 
rivalry  of,  39-40  ;  attitude 
towards  Payment  by  Results 
56-58,  62-69,  77-80,  87-94  • 
their  relation  to  Workshop 
Committees.  113-116  ;  con- 


162     THE  WORKS  MANAGER  TO-DAY 


sultation  of,  as  to  Scientific 
Management,  137-138  ;  their 
objection  to  Welfare  Work, 
141-149 

Trade  Union  Conditions,  restora- 
tion of,  55-56,  95-98 

Trade  Union  Rate.  See  Standard 
Sate 

Training  for  Welfare  Work,  151-2 

Unemployment,  22,  30,  98 

Ventilation,  122-3 

Wages,  management  should  have 


nothing  to  do   with,    99-102. 

See  Standard  Sate 
Wages  Boards,  80,  98 
Walton,  Cecil,  141 
Waste,  avoidance  of,  13 
Weir  System,  58,  59,  68 
Welfare  Work,  138-152 
Williams,  Alfred,  135 
Wood-working  trades,  the,  51,  87 
Woods,  C.  F.,  2 
Workshop,  the  tone  of  the,   25- 

27;  Committee,  113-116 
Works  management,  bibliography 

of,   1  ;  function  of,  2-14  ;  test 

of,  9-14 


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Published  by  the  Fabian  Society  and  by  George  Allen  and 
Unwin,  Limited  : — 

TOWARDS  SOCIAL  DEMOCRACY.     By  SIDNEY  WEBB. 
Demy  8vo.     Price  Is.  net. 

HOW  TO   PAY   FOR   THE   WAR.     Edited   by  SIDNEY 
WEBB.     Demy  8vo.      Price  6s.  net. 

Also  separate  chapters  from  the  above  : — 

THE     DEVELOPMENT     OF     THE     POST     OFFICE. 
Price  Is.  net. 

A    PUBLIC    SERVICE   OF   RAILWAY    AND    CANAL 

TRANSPORT.      Price  Is.  net. 

THE  NATIONALISATION    OF   THE   COAL    SUPPLY. 

Price  Is.  net. 

A  STATE  INSURANCE  DEPARTMENT.     Price  Is.  net. 

A     REVOLUTION     IN     THE    INCOME    TAX.      Price 
Is.  net. 

THE    FABIAN    BOOKSHOP 
25   TOTHILL  STREET,   WESTMINSTER,  S.W.I 

AND 

GEORGE    ALLEN    AND    UNWIN,   LIMITED, 
RUSKIN   HOUSE,    40   MUSEUM  STREET,   LONDON,   W.C.I 


OTHER  WORKS   BY   SIDNEY   AND   BEATRICE   WEBB. 

Published  by  the  Fabian  Society  : — 

SOCIALISM  AND  INDIVIDUALISM.  By  SIDNEY  WEBB 
and  Others.  Small  8vo.  96  pp.  Price  6d.,  paper;  Is., 
cloth. 

THE  BASIS  AND  POLICY  OF  SOCIALISM.  By 
SIDNEY  WEBB  and  Others.  Small  8vo.  96  pp.  Price  6d., 
paper;  Is.,  cloth. 

SOCIALISM  AND  NATIONAL  MINIMUM.  By  Mrs. 
SIDNEY  WEBB  and  Others.  Small  8vo.  96  pp.  Price 
6d.,  paper ;  Is.,  cloth. 

THE  NECESSARY  BASIS  OF  SOCIETY.     Price  Id. 
THE  DIFFICULTIES  OF  INDIVIDUALISM.     Price  Id. 
SOCIALISM  TRUE  AND  FALSE.     Price  Id. 

WHEN  PEACE  COMES :  THE  WAY  OF  INDUSTRIAL 
RECONSTRUCTION.  Price  2d. 

THE  WAR  AND  THE  WORKERS.     Price  Id. 
WHAT  ABOUT  THE  RATES  ?     Price  Id. 

THE    FABIAN    BOOKSHOP 

25   TOTHILL  STREET,  WESTMINSTER,  S.W.I 


DATE  DUE 


,."£  SOUTHERN REGIONAL  Lll 


